Correlation Between Security Bank and Jollibee Foods
Can any of the company-specific risk be diversified away by investing in both Security Bank and Jollibee 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 Security Bank and Jollibee Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Security Bank Corp and Jollibee Foods Corp, you can compare the effects of market volatilities on Security Bank and Jollibee 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 Security Bank with a short position of Jollibee Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Security Bank and Jollibee Foods.
Diversification Opportunities for Security Bank and Jollibee Foods
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Security and Jollibee is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Security Bank Corp and Jollibee Foods Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jollibee Foods Corp and Security Bank 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 Security Bank Corp are associated (or correlated) with Jollibee Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jollibee Foods Corp has no effect on the direction of Security Bank i.e., Security Bank and Jollibee Foods go up and down completely randomly.
Pair Corralation between Security Bank and Jollibee Foods
Assuming the 90 days trading horizon Security Bank Corp is expected to generate 1.52 times more return on investment than Jollibee Foods. However, Security Bank is 1.52 times more volatile than Jollibee Foods Corp. It trades about 0.07 of its potential returns per unit of risk. Jollibee Foods Corp is currently generating about -0.04 per unit of risk. If you would invest 6,225 in Security Bank Corp on November 2, 2024 and sell it today you would earn a total of 1,085 from holding Security Bank Corp or generate 17.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Security Bank Corp vs. Jollibee Foods Corp
Performance |
| Timeline |
| Security Bank Corp |
| Jollibee Foods Corp |
Security Bank and Jollibee Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Security Bank and Jollibee Foods
The main advantage of trading using opposite Security Bank and Jollibee Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Security Bank position performs unexpectedly, Jollibee 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 Jollibee Foods will offset losses from the drop in Jollibee Foods' long position.| Security Bank vs. BDO Unibank | Security Bank vs. Metropolitan Bank Trust | Security Bank vs. Union Bank of | Security Bank vs. Philippine National Bank |
| Jollibee Foods vs. Metropolitan Bank Trust | Jollibee Foods vs. Crown Asia Chemicals | Jollibee Foods vs. Atlas Consolidated Mining | Jollibee Foods vs. Converge Information Communications |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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