Correlation Between PLDT and KT
Can any of the company-specific risk be diversified away by investing in both PLDT and KT 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 KT 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 KT Corporation, you can compare the effects of market volatilities on PLDT and KT 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 KT. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLDT and KT.
Diversification Opportunities for PLDT and KT
Good diversification
The 3 months correlation between PLDT and KT is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding PLDT Inc ADR and KT Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KT Corporation 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 KT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KT Corporation has no effect on the direction of PLDT i.e., PLDT and KT go up and down completely randomly.
Pair Corralation between PLDT and KT
Considering the 90-day investment horizon PLDT is expected to generate 4.09 times less return on investment than KT. But when comparing it to its historical volatility, PLDT Inc ADR is 1.29 times less risky than KT. It trades about 0.17 of its potential returns per unit of risk. KT Corporation is currently generating about 0.55 of returns per unit of risk over similar time horizon. If you would invest 1,552 in KT Corporation on November 1, 2024 and sell it today you would earn a total of 207.00 from holding KT Corporation or generate 13.34% 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. KT Corp.
Performance |
| Timeline |
| PLDT Inc ADR |
| KT Corporation |
PLDT and KT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLDT and KT
The main advantage of trading using opposite PLDT and KT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLDT position performs unexpectedly, KT 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 KT will offset losses from the drop in KT's long position.| PLDT vs. KT Corporation | PLDT vs. Telefonica Brasil SA | PLDT vs. TIM Participacoes SA | PLDT vs. SK Telecom Co |
| KT vs. PLDT Inc ADR | KT vs. Telefonica Brasil SA | KT vs. TIM Participacoes SA | KT vs. Telkom Indonesia Tbk |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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