Correlation Between Jollibee Foods and STI Education

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

Diversification Opportunities for Jollibee Foods and STI Education

-0.05

Correlation Coefficient

Jollibee Foods  STI Education

Good diversification

The 3 months correlation between Jollibee and STI is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Jollibee Foods Corp and STI Education Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STI Education Systems 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 STI Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STI Education Systems has no effect on the direction of Jollibee Foods i.e., Jollibee Foods and STI Education go up and down completely randomly.

Pair Corralation between Jollibee Foods and STI Education

Assuming the 90 days trading horizon Jollibee Foods Corp is expected to generate 1.25 times more return on investment than STI Education. However, Jollibee Foods is 1.25 times more volatile than STI Education Systems. It trades about 0.04 of its potential returns per unit of risk. STI Education Systems is currently generating about -0.3 per unit of risk. If you would invest  22,620  in Jollibee Foods Corp on April 16, 2025 and sell it today you would earn a total of  320.00  from holding Jollibee Foods Corp or generate 1.41% 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.  STI Education Systems

Jollibee Foods Corp

Risk-Adjusted Performance

Very 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 newest stock price tumult, may contribute to shorter-term losses for the shareholders.

STI Education Systems

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in STI Education Systems are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, STI Education exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jollibee Foods and STI Education

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

The idea behind Jollibee Foods Corp and STI Education Systems 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.