Correlation Between PLDT and Vista Land

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

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

Diversification Opportunities for PLDT and Vista Land

0.5

Correlation Coefficient

PLDT  Vista Land

Very weak diversification

The 3 months correlation between PLDT and Vista is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding PLDT Inc and Vista Land Lifescapes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vista Land Lifescapes 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 Vista Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vista Land Lifescapes has no effect on the direction of PLDT i.e., PLDT and Vista Land go up and down completely randomly.

Pair Corralation between PLDT and Vista Land

Assuming the 90 days trading horizon PLDT Inc is expected to generate 1.31 times more return on investment than Vista Land. However, PLDT is 1.31 times more volatile than Vista Land Lifescapes. It trades about 0.09 of its potential returns per unit of risk. Vista Land Lifescapes is currently generating about 0.03 per unit of risk. If you would invest  121,278  in PLDT Inc on December 22, 2024 and sell it today you would earn a total of  8,822  from holding PLDT Inc or generate 7.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	83.05%
Values	Daily Returns

PLDT Inc  vs.  Vista Land Lifescapes

PLDT Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PLDT Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, PLDT may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Vista Land Lifescapes

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Vista Land Lifescapes are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable essential indicators, Vista Land is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with PLDT and Vista Land

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

The idea behind PLDT Inc and Vista Land Lifescapes 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.