Correlation Between Jollibee Foods and Converge Information
Can any of the company-specific risk be diversified away by investing in both Jollibee Foods and Converge Information at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Jollibee Foods and Converge Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jollibee Foods Corp and Converge Information Communications, you can compare the effects of market volatilities on Jollibee Foods and Converge Information and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Jollibee Foods with a short position of Converge Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jollibee Foods and Converge Information.
Diversification Opportunities for Jollibee Foods and Converge Information
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jollibee and Converge is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Jollibee Foods Corp and Converge Information Communica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Converge Information and Jollibee Foods is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Jollibee Foods Corp are associated (or correlated) with Converge Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Converge Information has no effect on the direction of Jollibee Foods i.e., Jollibee Foods and Converge Information go up and down completely randomly.
Pair Corralation between Jollibee Foods and Converge Information
Assuming the 90 days trading horizon Jollibee Foods Corp is expected to under-perform the Converge Information. But the stock apears to be less risky and, when comparing its historical volatility, Jollibee Foods Corp is 1.29 times less risky than Converge Information. The stock trades about -0.38 of its potential returns per unit of risk. The Converge Information Communications is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 1,650 in Converge Information Communications on November 5, 2024 and sell it today you would lose (50.00) from holding Converge Information Communications or give up 3.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jollibee Foods Corp vs. Converge Information Communica
Performance |
| Timeline |
| Jollibee Foods Corp |
| Converge Information |
Jollibee Foods and Converge Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jollibee Foods and Converge Information
The main advantage of trading using opposite Jollibee Foods and Converge Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jollibee Foods position performs unexpectedly, Converge Information can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Converge Information will offset losses from the drop in Converge Information's long position.| Jollibee Foods vs. Asia United Bank | Jollibee Foods vs. House of Investments | Jollibee Foods vs. National Reinsurance | Jollibee Foods vs. Apex Mining Co |
| Converge Information vs. Atlas Consolidated Mining | Converge Information vs. Bank of the | Converge Information vs. Rizal Commercial Banking | Converge Information vs. Transpacific Broadband Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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