Correlation Between PLDT and VEON
Can any of the company-specific risk be diversified away by investing in both PLDT and VEON 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 VEON 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 VEON, you can compare the effects of market volatilities on PLDT and VEON 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 VEON. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLDT and VEON.
Diversification Opportunities for PLDT and VEON
Good diversification
The 3 months correlation between PLDT and VEON is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding PLDT Inc ADR and VEON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VEON 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 VEON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VEON has no effect on the direction of PLDT i.e., PLDT and VEON go up and down completely randomly.
Pair Corralation between PLDT and VEON
Considering the 90-day investment horizon PLDT is expected to generate 7.27 times less return on investment than VEON. But when comparing it to its historical volatility, PLDT Inc ADR is 1.51 times less risky than VEON. It trades about 0.02 of its potential returns per unit of risk. VEON is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,062 in VEON on November 2, 2024 and sell it today you would earn a total of 2,273 from holding VEON or generate 110.23% 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. VEON
Performance |
| Timeline |
| PLDT Inc ADR |
| VEON |
PLDT and VEON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLDT and VEON
The main advantage of trading using opposite PLDT and VEON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLDT position performs unexpectedly, VEON 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 VEON will offset losses from the drop in VEON's long position.| PLDT vs. KT Corporation | PLDT vs. Telefonica Brasil SA | PLDT vs. TIM Participacoes SA | PLDT vs. SK Telecom Co |
| VEON vs. Telecom Argentina SA | VEON vs. Telkom Indonesia Tbk | VEON vs. PLDT Inc ADR | VEON vs. Telefonica Brasil 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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