Correlation Between Jollibee Foods and Union Bank
Can any of the company-specific risk be diversified away by investing in both Jollibee Foods and Union Bank 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 Union Bank 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 Union Bank of, you can compare the effects of market volatilities on Jollibee Foods and Union Bank 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 Union Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jollibee Foods and Union Bank.
Diversification Opportunities for Jollibee Foods and Union Bank
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Jollibee and Union is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Jollibee Foods Corp and Union Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Bank 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 Union Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Bank has no effect on the direction of Jollibee Foods i.e., Jollibee Foods and Union Bank go up and down completely randomly.
Pair Corralation between Jollibee Foods and Union Bank
Assuming the 90 days trading horizon Jollibee Foods Corp is expected to generate 1.08 times more return on investment than Union Bank. However, Jollibee Foods is 1.08 times more volatile than Union Bank of. It trades about 0.05 of its potential returns per unit of risk. Union Bank of is currently generating about -0.16 per unit of risk. If you would invest 26,718 in Jollibee Foods Corp on August 28, 2024 and sell it today you would earn a total of 442.00 from holding Jollibee Foods Corp or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jollibee Foods Corp vs. Union Bank of
Performance |
| Timeline |
| Jollibee Foods Corp |
| Union Bank |
Jollibee Foods and Union Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jollibee Foods and Union Bank
The main advantage of trading using opposite Jollibee Foods and Union Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jollibee Foods position performs unexpectedly, Union Bank 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 Union Bank will offset losses from the drop in Union Bank's long position.| Jollibee Foods vs. Cebu Air Preferred | Jollibee Foods vs. Pacificonline Systems | Jollibee Foods vs. Asia United Bank | Jollibee Foods vs. Philippine Business Bank |
| Union Bank vs. Apex Mining Co | Union Bank vs. Suntrust Home Developers | Union Bank vs. SM Investments Corp | Union Bank vs. Philex 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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