Correlation Between PLDT and Shenandoah Telecommunicatio

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

By analyzing existing cross correlation between PLDT Inc ADR and Shenandoah Telecommunications Co, you can compare the effects of market volatilities on PLDT and Shenandoah Telecommunicatio 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 Shenandoah Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLDT and Shenandoah Telecommunicatio.

Diversification Opportunities for PLDT and Shenandoah Telecommunicatio

-0.45

Correlation Coefficient

PLDT  Shenandoah Telecommunicatio

Very good diversification

The 3 months correlation between PLDT and Shenandoah is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding PLDT Inc ADR and Shenandoah Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenandoah Telecommunicatio 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 ADR are associated (or correlated) with Shenandoah Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenandoah Telecommunicatio has no effect on the direction of PLDT i.e., PLDT and Shenandoah Telecommunicatio go up and down completely randomly.

Pair Corralation between PLDT and Shenandoah Telecommunicatio

Considering the 90-day investment horizon PLDT Inc ADR is expected to generate 0.51 times more return on investment than Shenandoah Telecommunicatio. However, PLDT Inc ADR is 1.97 times less risky than Shenandoah Telecommunicatio. It trades about 0.08 of its potential returns per unit of risk. Shenandoah Telecommunications Co is currently generating about 0.02 per unit of risk. If you would invest  2,143  in PLDT Inc ADR on December 22, 2024 and sell it today you would earn a total of  139.00  from holding PLDT Inc ADR or generate 6.49% return on investment over 90 days.

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

PLDT Inc ADR  vs.  Shenandoah Telecommunications

PLDT Inc ADR

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PLDT Inc ADR are ranked lower than 6 (%) 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 April 2025.

Shenandoah Telecommunicatio

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Shenandoah Telecommunications Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Shenandoah Telecommunicatio is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with PLDT and Shenandoah Telecommunicatio

The main advantage of trading using opposite PLDT and Shenandoah Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLDT position performs unexpectedly, Shenandoah Telecommunicatio 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 Shenandoah Telecommunicatio will offset losses from the drop in Shenandoah Telecommunicatio's long position.

The idea behind PLDT Inc ADR and Shenandoah Telecommunications Co 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.