Correlation Between PLDT and Cable One
Can any of the company-specific risk be diversified away by investing in both PLDT and Cable One 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 PLDT and Cable One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLDT Inc ADR and Cable One, you can compare the effects of market volatilities on PLDT and Cable One 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 PLDT with a short position of Cable One. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLDT and Cable One.
Diversification Opportunities for PLDT and Cable One
Very good diversification
The 3 months correlation between PLDT and Cable is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding PLDT Inc ADR and Cable One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cable One and PLDT 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 PLDT Inc ADR are associated (or correlated) with Cable One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cable One has no effect on the direction of PLDT i.e., PLDT and Cable One go up and down completely randomly.
Pair Corralation between PLDT and Cable One
Considering the 90-day investment horizon PLDT Inc ADR is expected to generate 0.3 times more return on investment than Cable One. However, PLDT Inc ADR is 3.29 times less risky than Cable One. It trades about 0.26 of its potential returns per unit of risk. Cable One is currently generating about -0.21 per unit of risk. If you would invest 2,245 in PLDT Inc ADR on November 18, 2024 and sell it today you would earn a total of 95.00 from holding PLDT Inc ADR or generate 4.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PLDT Inc ADR vs. Cable One
Performance |
| Timeline |
| PLDT Inc ADR |
| Cable One |
PLDT and Cable One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLDT and Cable One
The main advantage of trading using opposite PLDT and Cable One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLDT position performs unexpectedly, Cable One 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 Cable One will offset losses from the drop in Cable One's long position.| PLDT vs. KT Corporation | PLDT vs. Telefonica Brasil SA | PLDT vs. TIM Participacoes SA | PLDT vs. SK Telecom Co |
| Cable One vs. Liberty Broadband Srs | Cable One vs. Liberty Broadband Corp | Cable One vs. Telkom Indonesia Tbk | Cable One vs. Liberty Global PLC |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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