Correlation Between Jiayin and Jollibee Foods

Can any of the company-specific risk be diversified away by investing in both Jiayin and Jollibee Foods 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 Jiayin and Jollibee Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jiayin Group and Jollibee Foods, you can compare the effects of market volatilities on Jiayin and Jollibee Foods 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 Jiayin with a short position of Jollibee Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiayin and Jollibee Foods.

Diversification Opportunities for Jiayin and Jollibee Foods

0.15

Correlation Coefficient

Jiayin  Jollibee Foods

Average diversification

The 3 months correlation between Jiayin and Jollibee is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Jiayin Group and Jollibee Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jollibee Foods and Jiayin 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 Jiayin Group are associated (or correlated) with Jollibee Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jollibee Foods has no effect on the direction of Jiayin i.e., Jiayin and Jollibee Foods go up and down completely randomly.

Pair Corralation between Jiayin and Jollibee Foods

Given the investment horizon of 90 days Jiayin is expected to generate 18.38 times less return on investment than Jollibee Foods. But when comparing it to its historical volatility, Jiayin Group is 8.55 times less risky than Jollibee Foods. It trades about 0.07 of its potential returns per unit of risk. Jollibee Foods is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  331.00  in Jollibee Foods on October 6, 2024 and sell it today you would earn a total of  132.00  from holding Jollibee Foods or generate 39.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.16%
Values	Daily Returns

Jiayin Group  vs.  Jollibee Foods

Jiayin Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jiayin Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Jollibee Foods

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jollibee Foods are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, Jollibee Foods is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Jiayin and Jollibee Foods

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

The idea behind Jiayin Group and Jollibee Foods 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.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.