Correlation Between Jollibee Foods and RFM Corp
Can any of the company-specific risk be diversified away by investing in both Jollibee Foods and RFM Corp 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 RFM Corp 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 RFM Corp, you can compare the effects of market volatilities on Jollibee Foods and RFM Corp 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 RFM Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jollibee Foods and RFM Corp.
Diversification Opportunities for Jollibee Foods and RFM Corp
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jollibee and RFM is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Jollibee Foods Corp and RFM Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RFM Corp 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 RFM Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RFM Corp has no effect on the direction of Jollibee Foods i.e., Jollibee Foods and RFM Corp go up and down completely randomly.
Pair Corralation between Jollibee Foods and RFM Corp
Assuming the 90 days trading horizon Jollibee Foods Corp is expected to generate 0.94 times more return on investment than RFM Corp. However, Jollibee Foods Corp is 1.07 times less risky than RFM Corp. It trades about 0.08 of its potential returns per unit of risk. RFM Corp is currently generating about 0.03 per unit of risk. If you would invest 22,249 in Jollibee Foods Corp on September 1, 2024 and sell it today you would earn a total of 3,551 from holding Jollibee Foods Corp or generate 15.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Jollibee Foods Corp vs. RFM Corp
Performance |
| Timeline |
| Jollibee Foods Corp |
| RFM Corp |
Jollibee Foods and RFM Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jollibee Foods and RFM Corp
The main advantage of trading using opposite Jollibee Foods and RFM Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jollibee Foods position performs unexpectedly, RFM Corp 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 RFM Corp will offset losses from the drop in RFM Corp's long position.| Jollibee Foods vs. Metropolitan Bank Trust | Jollibee Foods vs. Philex Mining Corp | Jollibee Foods vs. Top Frontier Investment | Jollibee Foods vs. BDO Unibank |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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