Correlation Between PLDT and Integrated Micro

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

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

Diversification Opportunities for PLDT and Integrated Micro

-0.32

Correlation Coefficient

PLDT  Integrated Micro

Very good diversification

The 3 months correlation between PLDT and Integrated is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding PLDT Inc and Integrated Micro Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Micro Ele 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 Integrated Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Micro Ele has no effect on the direction of PLDT i.e., PLDT and Integrated Micro go up and down completely randomly.

Pair Corralation between PLDT and Integrated Micro

Assuming the 90 days trading horizon PLDT Inc is expected to generate 0.44 times more return on investment than Integrated Micro. However, PLDT Inc is 2.28 times less risky than Integrated Micro. It trades about 0.03 of its potential returns per unit of risk. Integrated Micro Electronics is currently generating about 0.01 per unit of risk. If you would invest  125,433  in PLDT Inc on December 29, 2024 and sell it today you would earn a total of  2,967  from holding PLDT Inc or generate 2.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

PLDT Inc  vs.  Integrated Micro Electronics

PLDT Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PLDT Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, PLDT is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Integrated Micro Ele

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Integrated Micro Electronics are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Integrated Micro is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with PLDT and Integrated Micro

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

The idea behind PLDT Inc and Integrated Micro Electronics 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.