Correlation Between Jollibee Foods and National Reinsurance

Can any of the company-specific risk be diversified away by investing in both Jollibee Foods and National Reinsurance 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 National Reinsurance 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 National Reinsurance, you can compare the effects of market volatilities on Jollibee Foods and National Reinsurance 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 National Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jollibee Foods and National Reinsurance.

Diversification Opportunities for Jollibee Foods and National Reinsurance

-0.07

Correlation Coefficient

Jollibee Foods  National Reinsurance

Good diversification

The 3 months correlation between Jollibee and National is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Jollibee Foods Corp and National Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Reinsurance 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 National Reinsurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Reinsurance has no effect on the direction of Jollibee Foods i.e., Jollibee Foods and National Reinsurance go up and down completely randomly.

Pair Corralation between Jollibee Foods and National Reinsurance

Assuming the 90 days trading horizon Jollibee Foods is expected to generate 3.18 times less return on investment than National Reinsurance. But when comparing it to its historical volatility, Jollibee Foods Corp is 1.29 times less risky than National Reinsurance. It trades about 0.04 of its potential returns per unit of risk. National Reinsurance is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  57.00  in National Reinsurance on April 13, 2025 and sell it today you would earn a total of  8.00  from holding National Reinsurance or generate 14.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.61%
Values	Daily Returns

Jollibee Foods Corp  vs.  National Reinsurance

Jollibee Foods Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jollibee Foods Corp are ranked lower than 3 (%) 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.

National Reinsurance

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in National Reinsurance are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, National Reinsurance unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jollibee Foods and National Reinsurance

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

The idea behind Jollibee Foods Corp and National Reinsurance 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.