Correlation Between STI Education and Jollibee Foods
Can any of the company-specific risk be diversified away by investing in both STI Education 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 STI Education and Jollibee Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STI Education Systems and Jollibee Foods Corp, you can compare the effects of market volatilities on STI Education 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 STI Education with a short position of Jollibee Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of STI Education and Jollibee Foods.
Diversification Opportunities for STI Education and Jollibee Foods
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between STI and Jollibee is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding STI Education Systems 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 STI Education 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 STI Education Systems 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 STI Education i.e., STI Education and Jollibee Foods go up and down completely randomly.
Pair Corralation between STI Education and Jollibee Foods
Assuming the 90 days trading horizon STI Education is expected to generate 1.26 times less return on investment than Jollibee Foods. In addition to that, STI Education is 1.47 times more volatile than Jollibee Foods Corp. It trades about 0.02 of its total potential returns per unit of risk. Jollibee Foods Corp is currently generating about 0.04 per unit of volatility. If you would invest 26,679 in Jollibee Foods Corp on August 30, 2024 and sell it today you would earn a total of 501.00 from holding Jollibee Foods Corp or generate 1.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STI Education Systems vs. Jollibee Foods Corp
Performance |
| Timeline |
| STI Education Systems |
| Jollibee Foods Corp |
STI Education and Jollibee Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STI Education and Jollibee Foods
The main advantage of trading using opposite STI Education and Jollibee Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STI Education 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.| STI Education vs. Allhome Corp | STI Education vs. Jollibee Foods Corp | STI Education vs. LFM Properties Corp | STI Education vs. Altus Property Ventures |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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