Correlation Between Converge Information and PLDT
Can any of the company-specific risk be diversified away by investing in both Converge Information and PLDT 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 Converge Information and PLDT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Converge Information Communications and PLDT Inc, you can compare the effects of market volatilities on Converge Information and PLDT 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 Converge Information with a short position of PLDT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Converge Information and PLDT.
Diversification Opportunities for Converge Information and PLDT
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Converge and PLDT is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Converge Information Communica and PLDT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLDT Inc and Converge Information 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 Converge Information Communications are associated (or correlated) with PLDT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLDT Inc has no effect on the direction of Converge Information i.e., Converge Information and PLDT go up and down completely randomly.
Pair Corralation between Converge Information and PLDT
Assuming the 90 days trading horizon Converge Information Communications is expected to under-perform the PLDT. In addition to that, Converge Information is 1.23 times more volatile than PLDT Inc. It trades about -0.03 of its total potential returns per unit of risk. PLDT Inc is currently generating about -0.01 per unit of volatility. If you would invest 132,000 in PLDT Inc on October 11, 2024 and sell it today you would lose (500.00) from holding PLDT Inc or give up 0.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Converge Information Communica vs. PLDT Inc
Performance |
| Timeline |
| Converge Information |
| PLDT Inc |
Converge Information and PLDT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Converge Information and PLDT
The main advantage of trading using opposite Converge Information and PLDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Converge Information position performs unexpectedly, PLDT 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 PLDT will offset losses from the drop in PLDT's long position.| Converge Information vs. Globe Telecom | Converge Information vs. Cebu Air Preferred | Converge Information vs. Jollibee Foods Corp | Converge Information vs. Figaro Coffee Group |
| PLDT vs. Converge Information Communications | PLDT vs. Metro Retail Stores | PLDT vs. Concepcion Industrial Corp | PLDT vs. Integrated Micro Electronics |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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