Correlation Between Jollibee Foods and Union Bank
Can any of the company-specific risk be diversified away by investing in both Jollibee Foods and Union Bank 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 Union Bank 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 Union Bank of, you can compare the effects of market volatilities on Jollibee Foods and Union Bank 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 Union Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jollibee Foods and Union Bank.
Diversification Opportunities for Jollibee Foods and Union Bank
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jollibee and Union is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Jollibee Foods Corp and Union Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Bank 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 Union Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Bank has no effect on the direction of Jollibee Foods i.e., Jollibee Foods and Union Bank go up and down completely randomly.
Pair Corralation between Jollibee Foods and Union Bank
Assuming the 90 days trading horizon Jollibee Foods Corp is expected to under-perform the Union Bank. In addition to that, Jollibee Foods is 1.45 times more volatile than Union Bank of. It trades about -0.04 of its total potential returns per unit of risk. Union Bank of is currently generating about -0.02 per unit of volatility. If you would invest 3,280 in Union Bank of on April 20, 2025 and sell it today you would lose (80.00) from holding Union Bank of or give up 2.44% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Jollibee Foods Corp vs. Union Bank of
Performance |
Timeline |
Jollibee Foods Corp |
Union Bank |
Jollibee Foods and Union Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Jollibee Foods and Union Bank
The main advantage of trading using opposite Jollibee Foods and Union Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jollibee Foods position performs unexpectedly, Union Bank 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 Union Bank will offset losses from the drop in Union Bank's long position.Jollibee Foods vs. Transpacific Broadband Group | Jollibee Foods vs. Semirara Mining Corp | Jollibee Foods vs. Philippine Savings Bank | Jollibee Foods vs. SM Investments Corp |
Union Bank vs. Converge Information Communications | Union Bank vs. Apex Mining Co | Union Bank vs. Transpacific Broadband Group | Union Bank vs. Philex Mining Corp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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