Correlation Between QCR Holdings and PLDT

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

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

Diversification Opportunities for QCR Holdings and PLDT

-0.8

Correlation Coefficient

QCR Holdings  PLDT

Pay attention - limited upside

The 3 months correlation between QCR and PLDT is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding QCR Holdings 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 QCR Holdings 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 QCR Holdings 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 QCR Holdings i.e., QCR Holdings and PLDT go up and down completely randomly.

Pair Corralation between QCR Holdings and PLDT

Given the investment horizon of 90 days QCR Holdings is expected to under-perform the PLDT. But the stock apears to be less risky and, when comparing its historical volatility, QCR Holdings is 1.13 times less risky than PLDT. The stock trades about -0.17 of its potential returns per unit of risk. The PLDT Inc ADR is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  2,143  in PLDT Inc ADR on December 23, 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	Significant
Accuracy	100.0%
Values	Daily Returns

QCR Holdings  vs.  PLDT Inc ADR

QCR Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days QCR Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

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.

Pair Trading with QCR Holdings and PLDT

The main advantage of trading using opposite QCR Holdings and PLDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QCR Holdings 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 QCR Holdings 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.