Correlation Between Telecom Argentina and PLDT

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

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

Diversification Opportunities for Telecom Argentina and PLDT

-0.55

Correlation Coefficient

Telecom Argentina  PLDT

Excellent diversification

The 3 months correlation between Telecom and PLDT is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Argentina SA 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 Telecom Argentina 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 Telecom Argentina SA 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 Telecom Argentina i.e., Telecom Argentina and PLDT go up and down completely randomly.

Pair Corralation between Telecom Argentina and PLDT

Considering the 90-day investment horizon Telecom Argentina SA is expected to under-perform the PLDT. In addition to that, Telecom Argentina is 3.09 times more volatile than PLDT Inc ADR. It trades about -0.06 of its total potential returns per unit of risk. PLDT Inc ADR is currently generating about 0.06 per unit of volatility. If you would invest  2,155  in PLDT Inc ADR on December 28, 2024 and sell it today you would earn a total of  80.00  from holding PLDT Inc ADR or generate 3.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Telecom Argentina SA  vs.  PLDT Inc ADR

Telecom Argentina

Risk-Adjusted Performance

Very Weak

Over the last 90 days Telecom Argentina SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

PLDT Inc ADR

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PLDT Inc ADR are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, PLDT is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Telecom Argentina and PLDT

The main advantage of trading using opposite Telecom Argentina and PLDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecom Argentina 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 Telecom Argentina SA 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.