Correlation Between ATT and PLDT
Can any of the company-specific risk be diversified away by investing in both ATT 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 ATT and PLDT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and PLDT Inc, you can compare the effects of market volatilities on ATT 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 ATT with a short position of PLDT. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and PLDT.
Diversification Opportunities for ATT and PLDT
Pay attention - limited upside
The 3 months correlation between ATT and PLDT is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and PLDT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLDT Inc and ATT 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 ATT Inc 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 ATT i.e., ATT and PLDT go up and down completely randomly.
Pair Corralation between ATT and PLDT
Assuming the 90 days trading horizon ATT Inc is expected to generate 0.72 times more return on investment than PLDT. However, ATT Inc is 1.38 times less risky than PLDT. It trades about 0.23 of its potential returns per unit of risk. PLDT Inc is currently generating about -0.15 per unit of risk. If you would invest 2,050 in ATT Inc on August 31, 2024 and sell it today you would earn a total of 148.00 from holding ATT Inc or generate 7.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATT Inc vs. PLDT Inc
Performance |
| Timeline |
| ATT Inc |
| PLDT Inc |
ATT and PLDT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and PLDT
The main advantage of trading using opposite ATT and PLDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT 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.| ATT vs. NORTHEAST UTILITIES | ATT vs. PRECISION DRILLING P | ATT vs. Canadian Utilities Limited | ATT vs. Arrow Electronics |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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