Correlation Between Figaro Coffee and Jollibee Foods

Can any of the company-specific risk be diversified away by investing in both Figaro Coffee 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 Figaro Coffee and Jollibee Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Figaro Coffee Group and Jollibee Foods Corp, you can compare the effects of market volatilities on Figaro Coffee 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 Figaro Coffee with a short position of Jollibee Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Figaro Coffee and Jollibee Foods.

Diversification Opportunities for Figaro Coffee and Jollibee Foods

0.13

Correlation Coefficient

Figaro Coffee  Jollibee Foods

Average diversification

The 3 months correlation between Figaro and Jollibee is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Figaro Coffee 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 Figaro Coffee 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 Figaro Coffee 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 Figaro Coffee i.e., Figaro Coffee and Jollibee Foods go up and down completely randomly.

Pair Corralation between Figaro Coffee and Jollibee Foods

Assuming the 90 days trading horizon Figaro Coffee Group is expected to under-perform the Jollibee Foods. But the stock apears to be less risky and, when comparing its historical volatility, Figaro Coffee Group is 1.37 times less risky than Jollibee Foods. The stock trades about -0.06 of its potential returns per unit of risk. The Jollibee Foods Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  22,187  in Jollibee Foods Corp on April 24, 2025 and sell it today you would earn a total of  213.00  from holding Jollibee Foods Corp or generate 0.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Figaro Coffee Group  vs.  Jollibee Foods Corp

Figaro Coffee Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Figaro Coffee Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Figaro Coffee is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Jollibee Foods Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jollibee Foods Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Jollibee Foods is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Figaro Coffee and Jollibee Foods

The main advantage of trading using opposite Figaro Coffee and Jollibee Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Figaro Coffee 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.

The idea behind Figaro Coffee Group and Jollibee Foods Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.