Correlation Between Jollibee Foods and Axelum Resources

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

Diversification Opportunities for Jollibee Foods and Axelum Resources

0.43

Correlation Coefficient

Jollibee Foods  Axelum Resources

Very weak diversification

The 3 months correlation between Jollibee and Axelum is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Jollibee Foods Corp and Axelum Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axelum Resources Corp 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 Axelum Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axelum Resources Corp has no effect on the direction of Jollibee Foods i.e., Jollibee Foods and Axelum Resources go up and down completely randomly.

Pair Corralation between Jollibee Foods and Axelum Resources

Assuming the 90 days trading horizon Jollibee Foods Corp is expected to generate 0.51 times more return on investment than Axelum Resources. However, Jollibee Foods Corp is 1.95 times less risky than Axelum Resources. It trades about 0.02 of its potential returns per unit of risk. Axelum Resources Corp is currently generating about -0.01 per unit of risk. If you would invest  23,967  in Jollibee Foods Corp on October 11, 2024 and sell it today you would earn a total of  2,733  from holding Jollibee Foods Corp or generate 11.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.57%
Values	Daily Returns

Jollibee Foods Corp  vs.  Axelum Resources Corp

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 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.

Axelum Resources Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Axelum Resources Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Axelum Resources may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Jollibee Foods and Axelum Resources

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

The idea behind Jollibee Foods Corp and Axelum Resources Corp 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.