Correlation Between Jollibee Foods and Ayala Corp

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

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

Diversification Opportunities for Jollibee Foods and Ayala Corp

-0.19

Correlation Coefficient

Jollibee Foods  Ayala Corp

Good diversification

The 3 months correlation between Jollibee and Ayala is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Jollibee Foods Corp and Ayala Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ayala Corp and Jollibee Foods 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 Jollibee Foods Corp are associated (or correlated) with Ayala Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ayala Corp has no effect on the direction of Jollibee Foods i.e., Jollibee Foods and Ayala Corp go up and down completely randomly.

Pair Corralation between Jollibee Foods and Ayala Corp

Assuming the 90 days trading horizon Jollibee Foods is expected to generate 5.98 times less return on investment than Ayala Corp. But when comparing it to its historical volatility, Jollibee Foods Corp is 1.01 times less risky than Ayala Corp. It trades about 0.01 of its potential returns per unit of risk. Ayala Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  56,557  in Ayala Corp on April 25, 2025 and sell it today you would earn a total of  3,943  from holding Ayala Corp or generate 6.97% return on investment over 90 days.

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

Jollibee Foods Corp  vs.  Ayala Corp

Jollibee Foods Corp

Risk-Adjusted Performance

Weak

Over the last 90 days Jollibee Foods Corp has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Ayala Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ayala Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Ayala Corp may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Jollibee Foods and Ayala Corp

The main advantage of trading using opposite Jollibee Foods and Ayala Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jollibee Foods position performs unexpectedly, Ayala Corp 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 Ayala Corp will offset losses from the drop in Ayala Corp's long position.

The idea behind Jollibee Foods Corp and Ayala 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.