Correlation Between PLDT and Alliance Global
Can any of the company-specific risk be diversified away by investing in both PLDT and Alliance Global 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 Alliance Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLDT Inc and Alliance Global Group, you can compare the effects of market volatilities on PLDT and Alliance Global 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 Alliance Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLDT and Alliance Global.
Diversification Opportunities for PLDT and Alliance Global
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PLDT and Alliance is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding PLDT Inc and Alliance Global Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Global Group 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 are associated (or correlated) with Alliance Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Global Group has no effect on the direction of PLDT i.e., PLDT and Alliance Global go up and down completely randomly.
Pair Corralation between PLDT and Alliance Global
Assuming the 90 days trading horizon PLDT Inc is expected to under-perform the Alliance Global. In addition to that, PLDT is 1.44 times more volatile than Alliance Global Group. It trades about -0.24 of its total potential returns per unit of risk. Alliance Global Group is currently generating about -0.17 per unit of volatility. If you would invest 921.00 in Alliance Global Group on September 1, 2024 and sell it today you would lose (43.00) from holding Alliance Global Group or give up 4.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PLDT Inc vs. Alliance Global Group
Performance |
| Timeline |
| PLDT Inc |
| Alliance Global Group |
PLDT and Alliance Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLDT and Alliance Global
The main advantage of trading using opposite PLDT and Alliance Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLDT position performs unexpectedly, Alliance Global 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 Alliance Global will offset losses from the drop in Alliance Global's long position.| PLDT vs. Philex Mining Corp | PLDT vs. Semirara Mining Corp | PLDT vs. Philippine Savings Bank | PLDT vs. SM Investments Corp |
| Alliance Global vs. GT Capital Holdings | Alliance Global vs. Allhome Corp | Alliance Global vs. Jollibee Foods Corp | Alliance Global vs. LFM Properties Corp |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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