Correlation Between PLDT and Telephone
Can any of the company-specific risk be diversified away by investing in both PLDT and Telephone 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 Telephone 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 Telephone and Data, you can compare the effects of market volatilities on PLDT and Telephone 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 Telephone. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLDT and Telephone.
Diversification Opportunities for PLDT and Telephone
Excellent diversification
The 3 months correlation between PLDT and Telephone is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding PLDT Inc ADR and Telephone and Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telephone and Data 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 Telephone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telephone and Data has no effect on the direction of PLDT i.e., PLDT and Telephone go up and down completely randomly.
Pair Corralation between PLDT and Telephone
Considering the 90-day investment horizon PLDT is expected to generate 1.72 times less return on investment than Telephone. But when comparing it to its historical volatility, PLDT Inc ADR is 1.65 times less risky than Telephone. It trades about 0.17 of its potential returns per unit of risk. Telephone and Data is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 3,411 in Telephone and Data on November 1, 2024 and sell it today you would earn a total of 179.00 from holding Telephone and Data or generate 5.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PLDT Inc ADR vs. Telephone and Data
Performance |
| Timeline |
| PLDT Inc ADR |
| Telephone and Data |
PLDT and Telephone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLDT and Telephone
The main advantage of trading using opposite PLDT and Telephone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLDT position performs unexpectedly, Telephone 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 Telephone will offset losses from the drop in Telephone's long position.| PLDT vs. KT Corporation | PLDT vs. Telefonica Brasil SA | PLDT vs. TIM Participacoes SA | PLDT vs. SK Telecom Co |
| Telephone vs. Telephone and Data | Telephone vs. Shenandoah Telecommunications Co | Telephone vs. WideOpenWest | Telephone vs. ATN International |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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