Correlation Between Jollibee Foods and STI Education
Can any of the company-specific risk be diversified away by investing in both Jollibee Foods and STI Education 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 STI Education 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 STI Education Systems, you can compare the effects of market volatilities on Jollibee Foods and STI Education 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 STI Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jollibee Foods and STI Education.
Diversification Opportunities for Jollibee Foods and STI Education
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jollibee and STI is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Jollibee Foods Corp and STI Education Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STI Education Systems 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 STI Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STI Education Systems has no effect on the direction of Jollibee Foods i.e., Jollibee Foods and STI Education go up and down completely randomly.
Pair Corralation between Jollibee Foods and STI Education
Assuming the 90 days trading horizon Jollibee Foods Corp is expected to generate 1.2 times more return on investment than STI Education. However, Jollibee Foods is 1.2 times more volatile than STI Education Systems. It trades about 0.09 of its potential returns per unit of risk. STI Education Systems is currently generating about 0.06 per unit of risk. If you would invest 26,321 in Jollibee Foods Corp on August 30, 2024 and sell it today you would earn a total of 859.00 from holding Jollibee Foods Corp or generate 3.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jollibee Foods Corp vs. STI Education Systems
Performance |
| Timeline |
| Jollibee Foods Corp |
| STI Education Systems |
Jollibee Foods and STI Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jollibee Foods and STI Education
The main advantage of trading using opposite Jollibee Foods and STI Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jollibee Foods position performs unexpectedly, STI Education 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 STI Education will offset losses from the drop in STI Education'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 |
| STI Education vs. Allhome Corp | STI Education vs. Jollibee Foods Corp | STI Education vs. LFM Properties Corp | STI Education vs. Altus Property Ventures |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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