Correlation Between PLDT and RFM Corp
Can any of the company-specific risk be diversified away by investing in both PLDT and RFM Corp 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 RFM Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLDT Inc and RFM Corp, you can compare the effects of market volatilities on PLDT and RFM Corp 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 RFM Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLDT and RFM Corp.
Diversification Opportunities for PLDT and RFM Corp
Pay attention - limited upside
The 3 months correlation between PLDT and RFM is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding PLDT Inc and RFM Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RFM Corp 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 RFM Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RFM Corp has no effect on the direction of PLDT i.e., PLDT and RFM Corp go up and down completely randomly.
Pair Corralation between PLDT and RFM Corp
Assuming the 90 days trading horizon PLDT Inc is expected to under-perform the RFM Corp. But the stock apears to be less risky and, when comparing its historical volatility, PLDT Inc is 1.02 times less risky than RFM Corp. The stock trades about -0.04 of its potential returns per unit of risk. The RFM Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 369.00 in RFM Corp on August 29, 2024 and sell it today you would earn a total of 11.00 from holding RFM Corp or generate 2.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.37% |
| Values | Daily Returns |
PLDT Inc vs. RFM Corp
Performance |
| Timeline |
| PLDT Inc |
| RFM Corp |
PLDT and RFM Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLDT and RFM Corp
The main advantage of trading using opposite PLDT and RFM Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLDT position performs unexpectedly, RFM Corp 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 RFM Corp will offset losses from the drop in RFM Corp's long position.| PLDT vs. Allhome Corp | PLDT vs. Jollibee Foods Corp | PLDT vs. LFM Properties Corp | PLDT vs. Altus Property Ventures |
| RFM Corp vs. Swift Foods | RFM Corp vs. Allhome Corp | RFM Corp vs. Jollibee Foods Corp | RFM Corp 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |