Correlation Between Jollibee Foods and ATN Holdings

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

Diversification Opportunities for Jollibee Foods and ATN Holdings

0.02

Correlation Coefficient

Jollibee Foods  ATN Holdings

Significant diversification

The 3 months correlation between Jollibee and ATN is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Jollibee Foods Corp and ATN Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATN Holdings 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 ATN Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATN Holdings has no effect on the direction of Jollibee Foods i.e., Jollibee Foods and ATN Holdings go up and down completely randomly.

Pair Corralation between Jollibee Foods and ATN Holdings

Assuming the 90 days trading horizon Jollibee Foods is expected to generate 4.03 times less return on investment than ATN Holdings. In addition to that, Jollibee Foods is 1.6 times more volatile than ATN Holdings. It trades about 0.03 of its total potential returns per unit of risk. ATN Holdings is currently generating about 0.16 per unit of volatility. If you would invest  47.00  in ATN Holdings on September 17, 2024 and sell it today you would earn a total of  2.00  from holding ATN Holdings or generate 4.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Jollibee Foods Corp  vs.  ATN Holdings

Jollibee Foods Corp

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jollibee Foods Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

ATN Holdings

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ATN Holdings are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, ATN Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jollibee Foods and ATN Holdings

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

The idea behind Jollibee Foods Corp and ATN 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.