Correlation Between VEON and PLDT
Can any of the company-specific risk be diversified away by investing in both VEON 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 VEON and PLDT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VEON and PLDT Inc ADR, you can compare the effects of market volatilities on VEON 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 VEON with a short position of PLDT. Check out your portfolio center. Please also check ongoing floating volatility patterns of VEON and PLDT.
Diversification Opportunities for VEON and PLDT
Weak diversification
The 3 months correlation between VEON and PLDT is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding VEON and PLDT Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLDT Inc ADR and VEON 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 VEON 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 ADR has no effect on the direction of VEON i.e., VEON and PLDT go up and down completely randomly.
Pair Corralation between VEON and PLDT
Given the investment horizon of 90 days VEON is expected to generate 1.49 times more return on investment than PLDT. However, VEON is 1.49 times more volatile than PLDT Inc ADR. It trades about 0.09 of its potential returns per unit of risk. PLDT Inc ADR is currently generating about 0.03 per unit of risk. If you would invest 1,763 in VEON on November 19, 2024 and sell it today you would earn a total of 2,762 from holding VEON or generate 156.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VEON vs. PLDT Inc ADR
Performance |
| Timeline |
| VEON |
| PLDT Inc ADR |
VEON and PLDT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VEON and PLDT
The main advantage of trading using opposite VEON and PLDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VEON 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.| VEON vs. Telecom Argentina SA | VEON vs. Telkom Indonesia Tbk | VEON vs. PLDT Inc ADR | VEON vs. Telefonica Brasil SA |
| PLDT vs. KT Corporation | PLDT vs. Telefonica Brasil SA | PLDT vs. TIM Participacoes SA | PLDT vs. SK Telecom Co |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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