Correlation Between Jollibee Foods and Bagger Daves

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

Diversification Opportunities for Jollibee Foods and Bagger Daves

0.19

Correlation Coefficient

Jollibee Foods  Bagger Daves

Average diversification

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

Pair Corralation between Jollibee Foods and Bagger Daves

Assuming the 90 days horizon Jollibee Foods Corp is expected to generate 1.98 times more return on investment than Bagger Daves. However, Jollibee Foods is 1.98 times more volatile than Bagger Daves Burger. It trades about -0.02 of its potential returns per unit of risk. Bagger Daves Burger is currently generating about -0.22 per unit of risk. If you would invest  1,757  in Jollibee Foods Corp on December 29, 2024 and sell it today you would lose (164.00) from holding Jollibee Foods Corp or give up 9.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

Jollibee Foods Corp  vs.  Bagger Daves Burger

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 fairly strong fundamental indicators, Jollibee Foods is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Bagger Daves Burger

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bagger Daves Burger has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Jollibee Foods and Bagger Daves

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

The idea behind Jollibee Foods Corp and Bagger Daves Burger 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.