Correlation Between ZA and Jollibee Foods
Can any of the company-specific risk be diversified away by investing in both ZA 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 ZA and Jollibee Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZA Group and Jollibee Foods Corp, you can compare the effects of market volatilities on ZA 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 ZA with a short position of Jollibee Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZA and Jollibee Foods.
Diversification Opportunities for ZA and Jollibee Foods
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between ZA and Jollibee is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding ZA Group 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 ZA 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 ZA Group 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 ZA i.e., ZA and Jollibee Foods go up and down completely randomly.
Pair Corralation between ZA and Jollibee Foods
Given the investment horizon of 90 days ZA Group is expected to under-perform the Jollibee Foods. In addition to that, ZA is 9.88 times more volatile than Jollibee Foods Corp. It trades about -0.22 of its total potential returns per unit of risk. Jollibee Foods Corp is currently generating about 0.28 per unit of volatility. If you would invest 1,745 in Jollibee Foods Corp on September 12, 2024 and sell it today you would earn a total of 229.00 from holding Jollibee Foods Corp or generate 13.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZA Group vs. Jollibee Foods Corp
Performance |
| Timeline |
| ZA Group |
| Jollibee Foods Corp |
ZA and Jollibee Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZA and Jollibee Foods
The main advantage of trading using opposite ZA and Jollibee Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZA 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.| ZA vs. Jollibee Foods Corp | ZA vs. Nathans Famous | ZA vs. Good Times Restaurants | ZA vs. Compass Group PLC |
| Jollibee Foods vs. Nathans Famous | Jollibee Foods vs. Good Times Restaurants | Jollibee Foods vs. McDonalds Holdings | Jollibee Foods vs. Compass Group PLC |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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