Correlation Between Orange SA and PLDT
Can any of the company-specific risk be diversified away by investing in both Orange SA 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 Orange SA and PLDT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orange SA ADR and PLDT Inc ADR, you can compare the effects of market volatilities on Orange SA 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 Orange SA with a short position of PLDT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orange SA and PLDT.
Diversification Opportunities for Orange SA and PLDT
Poor diversification
The 3 months correlation between Orange and PLDT is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Orange SA ADR and PLDT Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLDT Inc ADR and Orange SA 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 Orange SA ADR 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 ADR has no effect on the direction of Orange SA i.e., Orange SA and PLDT go up and down completely randomly.
Pair Corralation between Orange SA and PLDT
Given the investment horizon of 90 days Orange SA ADR is expected to generate 0.51 times more return on investment than PLDT. However, Orange SA ADR is 1.98 times less risky than PLDT. It trades about 0.04 of its potential returns per unit of risk. PLDT Inc ADR is currently generating about 0.0 per unit of risk. If you would invest 888.00 in Orange SA ADR on August 23, 2024 and sell it today you would earn a total of 158.00 from holding Orange SA ADR or generate 17.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orange SA ADR vs. PLDT Inc ADR
Performance |
| Timeline |
| Orange SA ADR |
| PLDT Inc ADR |
Orange SA and PLDT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orange SA and PLDT
The main advantage of trading using opposite Orange SA and PLDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orange SA 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.| Orange SA vs. Telefonica Brasil SA | Orange SA vs. Vodafone Group PLC | Orange SA vs. Grupo Televisa SAB | Orange SA vs. America Movil SAB |
| PLDT vs. KT Corporation | PLDT vs. Telefonica Brasil SA | PLDT vs. Orange SA ADR | PLDT vs. TIM Participacoes SA |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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