Correlation Between Jollibee Foods and Dito CME
Can any of the company-specific risk be diversified away by investing in both Jollibee Foods and Dito CME 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 Dito CME 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 Dito CME Holdings, you can compare the effects of market volatilities on Jollibee Foods and Dito CME 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 Dito CME. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jollibee Foods and Dito CME.
Diversification Opportunities for Jollibee Foods and Dito CME
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jollibee and Dito is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Jollibee Foods Corp and Dito CME Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dito CME Holdings 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 Dito CME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dito CME Holdings has no effect on the direction of Jollibee Foods i.e., Jollibee Foods and Dito CME go up and down completely randomly.
Pair Corralation between Jollibee Foods and Dito CME
Assuming the 90 days trading horizon Jollibee Foods Corp is expected to generate 0.55 times more return on investment than Dito CME. However, Jollibee Foods Corp is 1.82 times less risky than Dito CME. It trades about 0.03 of its potential returns per unit of risk. Dito CME Holdings is currently generating about -0.05 per unit of risk. If you would invest 23,165 in Jollibee Foods Corp on August 29, 2024 and sell it today you would earn a total of 3,995 from holding Jollibee Foods Corp or generate 17.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jollibee Foods Corp vs. Dito CME Holdings
Performance |
| Timeline |
| Jollibee Foods Corp |
| Dito CME Holdings |
Jollibee Foods and Dito CME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jollibee Foods and Dito CME
The main advantage of trading using opposite Jollibee Foods and Dito CME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jollibee Foods position performs unexpectedly, Dito CME 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 Dito CME will offset losses from the drop in Dito CME's long position.| Jollibee Foods vs. Cebu Air Preferred | Jollibee Foods vs. Pacificonline Systems | Jollibee Foods vs. Asia United Bank | Jollibee Foods vs. Philippine Business Bank |
| Dito CME vs. Concepcion Industrial Corp | Dito CME vs. Converge Information Communications | Dito CME vs. Lepanto Consolidated Mining | Dito CME vs. STI Education Systems |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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