Correlation Between Jollibee Foods and Globe Telecom
Can any of the company-specific risk be diversified away by investing in both Jollibee Foods and Globe Telecom 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 Globe Telecom 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 Globe Telecom, you can compare the effects of market volatilities on Jollibee Foods and Globe Telecom 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 Globe Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jollibee Foods and Globe Telecom.
Diversification Opportunities for Jollibee Foods and Globe Telecom
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jollibee and Globe is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Jollibee Foods Corp and Globe Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globe Telecom 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 Globe Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globe Telecom has no effect on the direction of Jollibee Foods i.e., Jollibee Foods and Globe Telecom go up and down completely randomly.
Pair Corralation between Jollibee Foods and Globe Telecom
Assuming the 90 days trading horizon Jollibee Foods Corp is expected to generate 0.87 times more return on investment than Globe Telecom. However, Jollibee Foods Corp is 1.16 times less risky than Globe Telecom. It trades about 0.07 of its potential returns per unit of risk. Globe Telecom is currently generating about -0.03 per unit of risk. If you would invest 25,586 in Jollibee Foods Corp on August 29, 2024 and sell it today you would earn a total of 1,574 from holding Jollibee Foods Corp or generate 6.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Jollibee Foods Corp vs. Globe Telecom
Performance |
| Timeline |
| Jollibee Foods Corp |
| Globe Telecom |
Jollibee Foods and Globe Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jollibee Foods and Globe Telecom
The main advantage of trading using opposite Jollibee Foods and Globe Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jollibee Foods position performs unexpectedly, Globe Telecom 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 Globe Telecom will offset losses from the drop in Globe Telecom's long position.| Jollibee Foods vs. Atlas Consolidated Mining | Jollibee Foods vs. Top Frontier Investment | Jollibee Foods vs. Converge Information Communications | Jollibee Foods vs. Manila Mining Corp |
| Globe Telecom vs. PLDT Inc | Globe Telecom vs. Allhome Corp | Globe Telecom vs. Jollibee Foods Corp | Globe Telecom vs. LFM Properties Corp |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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