Correlation Between PLDT and Manulife Financial

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

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

Diversification Opportunities for PLDT and Manulife Financial

0.0

Correlation Coefficient

PLDT  Manulife Financial

Pay attention - limited upside

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

Pair Corralation between PLDT and Manulife Financial

If you would invest (100.00) in PLDT Inc on December 31, 2024 and sell it today you would earn a total of  100.00  from holding PLDT Inc or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

PLDT Inc  vs.  Manulife Financial Corp

PLDT Inc

Risk-Adjusted Performance

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 rather sound technical and fundamental indicators, PLDT is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Manulife Financial Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Manulife Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Manulife Financial 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 Manulife Financial

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

The idea behind PLDT Inc and Manulife Financial Corp 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.