Correlation Between Sun Life and Jollibee Foods
Can any of the company-specific risk be diversified away by investing in both Sun Life 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 Sun Life and Jollibee Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sun Life Financial and Jollibee Foods Corp, you can compare the effects of market volatilities on Sun Life 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 Sun Life with a short position of Jollibee Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Life and Jollibee Foods.
Diversification Opportunities for Sun Life and Jollibee Foods
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sun and Jollibee is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Sun Life Financial 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 Sun Life 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 Sun Life Financial 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 Sun Life i.e., Sun Life and Jollibee Foods go up and down completely randomly.
Pair Corralation between Sun Life and Jollibee Foods
Assuming the 90 days trading horizon Sun Life Financial is expected to generate 2.82 times more return on investment than Jollibee Foods. However, Sun Life is 2.82 times more volatile than Jollibee Foods Corp. It trades about 0.16 of its potential returns per unit of risk. Jollibee Foods Corp is currently generating about 0.01 per unit of risk. If you would invest 300,000 in Sun Life Financial on August 25, 2024 and sell it today you would earn a total of 40,000 from holding Sun Life Financial or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Sun Life Financial vs. Jollibee Foods Corp
Performance |
| Timeline |
| Sun Life Financial |
| Jollibee Foods Corp |
Sun Life and Jollibee Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Life and Jollibee Foods
The main advantage of trading using opposite Sun Life and Jollibee Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Life 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.| Sun Life vs. Manulife Financial Corp | Sun Life vs. National Reinsurance | Sun Life vs. Allhome Corp | Sun Life vs. Jollibee Foods Corp |
| Jollibee Foods vs. Philex Mining Corp | Jollibee Foods vs. Apex Mining Co | Jollibee Foods vs. Converge Information Communications | Jollibee Foods vs. Atlas Consolidated Mining |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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