Correlation Between Jollibee Foods and PLDT
Can any of the company-specific risk be diversified away by investing in both Jollibee Foods and PLDT 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 PLDT 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 PLDT Inc, you can compare the effects of market volatilities on Jollibee Foods and PLDT 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 PLDT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jollibee Foods and PLDT.
Diversification Opportunities for Jollibee Foods and PLDT
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Jollibee and PLDT is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Jollibee Foods Corp and PLDT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLDT Inc 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 PLDT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLDT Inc has no effect on the direction of Jollibee Foods i.e., Jollibee Foods and PLDT go up and down completely randomly.
Pair Corralation between Jollibee Foods and PLDT
Assuming the 90 days trading horizon Jollibee Foods Corp is expected to generate 1.16 times more return on investment than PLDT. However, Jollibee Foods is 1.16 times more volatile than PLDT Inc. It trades about -0.04 of its potential returns per unit of risk. PLDT Inc is currently generating about -0.24 per unit of risk. If you would invest 26,341 in Jollibee Foods Corp on September 1, 2024 and sell it today you would lose (541.00) from holding Jollibee Foods Corp or give up 2.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Jollibee Foods Corp vs. PLDT Inc
Performance |
| Timeline |
| Jollibee Foods Corp |
| PLDT Inc |
Jollibee Foods and PLDT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jollibee Foods and PLDT
The main advantage of trading using opposite Jollibee Foods and PLDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jollibee Foods position performs unexpectedly, PLDT 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 PLDT will offset losses from the drop in PLDT'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 |
| PLDT vs. Philex Mining Corp | PLDT vs. Semirara Mining Corp | PLDT vs. Philippine Savings Bank | PLDT vs. SM Investments 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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