Correlation Between Jollibee Foods and Medco Holdings
Can any of the company-specific risk be diversified away by investing in both Jollibee Foods and Medco Holdings 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 Medco Holdings 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 Medco Holdings, you can compare the effects of market volatilities on Jollibee Foods and Medco Holdings 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 Medco Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jollibee Foods and Medco Holdings.
Diversification Opportunities for Jollibee Foods and Medco Holdings
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jollibee and Medco is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Jollibee Foods Corp and Medco Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medco 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 Medco Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medco Holdings has no effect on the direction of Jollibee Foods i.e., Jollibee Foods and Medco Holdings go up and down completely randomly.
Pair Corralation between Jollibee Foods and Medco Holdings
Assuming the 90 days trading horizon Jollibee Foods is expected to generate 15.51 times less return on investment than Medco Holdings. But when comparing it to its historical volatility, Jollibee Foods Corp is 7.24 times less risky than Medco Holdings. It trades about 0.04 of its potential returns per unit of risk. Medco Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 8.20 in Medco Holdings on August 29, 2024 and sell it today you would earn a total of 3.80 from holding Medco Holdings or generate 46.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 47.85% |
| Values | Daily Returns |
Jollibee Foods Corp vs. Medco Holdings
Performance |
| Timeline |
| Jollibee Foods Corp |
| Medco Holdings |
Jollibee Foods and Medco Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jollibee Foods and Medco Holdings
The main advantage of trading using opposite Jollibee Foods and Medco Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jollibee Foods position performs unexpectedly, Medco Holdings 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 Medco Holdings will offset losses from the drop in Medco Holdings' 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 |
| Medco Holdings vs. VistaREIT | Medco Holdings vs. Bright Kindle Resources | Medco Holdings vs. Allhome Corp | Medco Holdings vs. Jollibee Foods 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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