Correlation Between Ford and PLDT
Can any of the company-specific risk be diversified away by investing in both Ford 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 Ford and PLDT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and PLDT Inc, you can compare the effects of market volatilities on Ford 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 Ford with a short position of PLDT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and PLDT.
Diversification Opportunities for Ford and PLDT
Excellent diversification
The 3 months correlation between Ford and PLDT is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and PLDT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLDT Inc and Ford 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 Ford Motor 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 Ford i.e., Ford and PLDT go up and down completely randomly.
Pair Corralation between Ford and PLDT
Taking into account the 90-day investment horizon Ford Motor is expected to generate 1.27 times more return on investment than PLDT. However, Ford is 1.27 times more volatile than PLDT Inc. It trades about 0.01 of its potential returns per unit of risk. PLDT Inc is currently generating about 0.0 per unit of risk. If you would invest 1,148 in Ford Motor on September 3, 2024 and sell it today you would lose (35.00) from holding Ford Motor or give up 3.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.02% |
| Values | Daily Returns |
Ford Motor vs. PLDT Inc
Performance |
| Timeline |
| Ford Motor |
| PLDT Inc |
Ford and PLDT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and PLDT
The main advantage of trading using opposite Ford and PLDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford 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.| Ford vs. GreenPower Motor | Ford vs. ZEEKR Intelligent Technology | Ford vs. Volcon Inc | Ford vs. Ford Motor |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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