Correlation Between PLDT and Easycall Communications

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

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

Diversification Opportunities for PLDT and Easycall Communications

0.0

Correlation Coefficient

PLDT  Easycall Communications

Pay attention - limited upside

The 3 months correlation between PLDT and Easycall is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PLDT Inc and Easycall Communications Philip in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Easycall Communications 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 Easycall Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Easycall Communications has no effect on the direction of PLDT i.e., PLDT and Easycall Communications go up and down completely randomly.

Pair Corralation between PLDT and Easycall Communications

Assuming the 90 days trading horizon PLDT Inc is expected to under-perform the Easycall Communications. But the stock apears to be less risky and, when comparing its historical volatility, PLDT Inc is 6.66 times less risky than Easycall Communications. The stock trades about -0.07 of its potential returns per unit of risk. The Easycall Communications Philippines is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  200.00  in Easycall Communications Philippines on October 7, 2024 and sell it today you would earn a total of  5.00  from holding Easycall Communications Philippines or generate 2.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	52.94%
Values	Daily Returns

PLDT Inc  vs.  Easycall Communications Philip

PLDT Inc

Risk-Adjusted Performance

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Very Weak

Over the last 90 days PLDT Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Easycall Communications

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Easycall Communications Philippines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Easycall Communications is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with PLDT and Easycall Communications

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

The idea behind PLDT Inc and Easycall Communications Philippines 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.