Correlation Between Jollibee Foods and Swift Foods
Can any of the company-specific risk be diversified away by investing in both Jollibee Foods and Swift Foods 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 Swift Foods 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 Swift Foods, you can compare the effects of market volatilities on Jollibee Foods and Swift Foods 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 Swift Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jollibee Foods and Swift Foods.
Diversification Opportunities for Jollibee Foods and Swift Foods
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Jollibee and Swift is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Jollibee Foods Corp and Swift Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swift Foods 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 Swift Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swift Foods has no effect on the direction of Jollibee Foods i.e., Jollibee Foods and Swift Foods go up and down completely randomly.
Pair Corralation between Jollibee Foods and Swift Foods
Assuming the 90 days trading horizon Jollibee Foods is expected to generate 1.96 times less return on investment than Swift Foods. But when comparing it to its historical volatility, Jollibee Foods Corp is 2.11 times less risky than Swift Foods. It trades about 0.01 of its potential returns per unit of risk. Swift Foods is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 5.40 in Swift Foods on November 18, 2024 and sell it today you would lose (0.20) from holding Swift Foods or give up 3.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Jollibee Foods Corp vs. Swift Foods
Performance |
| Timeline |
| Jollibee Foods Corp |
| Swift Foods |
Jollibee Foods and Swift Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jollibee Foods and Swift Foods
The main advantage of trading using opposite Jollibee Foods and Swift Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jollibee Foods position performs unexpectedly, Swift Foods 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 Swift Foods will offset losses from the drop in Swift Foods' long position.| Jollibee Foods vs. Prime Media Holdings | Jollibee Foods vs. Bank of the | Jollibee Foods vs. SM Investments Corp | Jollibee Foods vs. COL Financial Group |
| Swift Foods vs. Atlas Consolidated Mining | Swift Foods vs. Union Bank of | Swift Foods vs. East West Banking | Swift Foods vs. Semirara Mining 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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