Correlation Between Cable One and PLDT

Can any of the company-specific risk be diversified away by investing in both Cable One 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 Cable One and PLDT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cable One and PLDT Inc ADR, you can compare the effects of market volatilities on Cable One 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 Cable One with a short position of PLDT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cable One and PLDT.

Diversification Opportunities for Cable One and PLDT

-0.53

Correlation Coefficient

Cable One  PLDT

Excellent diversification

The 3 months correlation between Cable and PLDT is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Cable One 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 Cable One 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 Cable One 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 Cable One i.e., Cable One and PLDT go up and down completely randomly.

Pair Corralation between Cable One and PLDT

Given the investment horizon of 90 days Cable One is expected to under-perform the PLDT. In addition to that, Cable One is 2.24 times more volatile than PLDT Inc ADR. It trades about -0.3 of its total potential returns per unit of risk. PLDT Inc ADR is currently generating about 0.11 per unit of volatility. If you would invest  2,219  in PLDT Inc ADR on November 28, 2024 and sell it today you would earn a total of  148.00  from holding PLDT Inc ADR or generate 6.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Cable One  vs.  PLDT Inc ADR

Cable One

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cable One has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's fundamental drivers remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

PLDT Inc ADR

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PLDT Inc ADR are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain technical indicators, PLDT may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Cable One and PLDT

The main advantage of trading using opposite Cable One and PLDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cable One 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.

The idea behind Cable One and PLDT Inc ADR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.