Correlation Between Jollibee Foods and AyalaLand Logistics

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

Diversification Opportunities for Jollibee Foods and AyalaLand Logistics

0.54

Correlation Coefficient

Jollibee Foods  AyalaLand Logistics

Very weak diversification

The 3 months correlation between Jollibee and AyalaLand is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Jollibee Foods Corp and AyalaLand Logistics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AyalaLand Logistics 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 AyalaLand Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AyalaLand Logistics has no effect on the direction of Jollibee Foods i.e., Jollibee Foods and AyalaLand Logistics go up and down completely randomly.

Pair Corralation between Jollibee Foods and AyalaLand Logistics

Assuming the 90 days trading horizon Jollibee Foods Corp is expected to under-perform the AyalaLand Logistics. In addition to that, Jollibee Foods is 1.18 times more volatile than AyalaLand Logistics Holdings. It trades about -0.26 of its total potential returns per unit of risk. AyalaLand Logistics Holdings is currently generating about 0.06 per unit of volatility. If you would invest  166.00  in AyalaLand Logistics Holdings on October 25, 2024 and sell it today you would earn a total of  2.00  from holding AyalaLand Logistics Holdings or generate 1.2% return on investment over 90 days.

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

Jollibee Foods Corp  vs.  AyalaLand Logistics Holdings

Jollibee Foods Corp

Risk-Adjusted Performance

0 of 100

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 latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

AyalaLand Logistics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days AyalaLand Logistics Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's essential indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Jollibee Foods and AyalaLand Logistics

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

The idea behind Jollibee Foods Corp and AyalaLand Logistics Holdings 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.