Correlation Between Philippine Savings and PLDT
Can any of the company-specific risk be diversified away by investing in both Philippine Savings 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 Philippine Savings and PLDT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Philippine Savings Bank and PLDT Inc, you can compare the effects of market volatilities on Philippine Savings 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 Philippine Savings with a short position of PLDT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Philippine Savings and PLDT.
Diversification Opportunities for Philippine Savings and PLDT
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Philippine and PLDT is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Philippine Savings Bank and PLDT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLDT Inc and Philippine Savings 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 Philippine Savings Bank 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 has no effect on the direction of Philippine Savings i.e., Philippine Savings and PLDT go up and down completely randomly.
Pair Corralation between Philippine Savings and PLDT
Assuming the 90 days trading horizon Philippine Savings Bank is expected to generate 0.86 times more return on investment than PLDT. However, Philippine Savings Bank is 1.16 times less risky than PLDT. It trades about 0.03 of its potential returns per unit of risk. PLDT Inc is currently generating about 0.0 per unit of risk. If you would invest 4,953 in Philippine Savings Bank on September 3, 2024 and sell it today you would earn a total of 1,047 from holding Philippine Savings Bank or generate 21.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.12% |
| Values | Daily Returns |
Philippine Savings Bank vs. PLDT Inc
Performance |
| Timeline |
| Philippine Savings Bank |
| PLDT Inc |
Philippine Savings and PLDT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Philippine Savings and PLDT
The main advantage of trading using opposite Philippine Savings and PLDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Philippine Savings 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.| Philippine Savings vs. BDO Unibank | Philippine Savings vs. Metropolitan Bank Trust | Philippine Savings vs. Security Bank Corp | Philippine Savings vs. Union Bank of |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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