Correlation Between U S Cellular and PLDT

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

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

Diversification Opportunities for U S Cellular and PLDT

0.45

Correlation Coefficient

U S Cellular  PLDT

Very weak diversification

The 3 months correlation between USM and PLDT is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding United States Cellular 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 U S Cellular 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 United States Cellular 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 U S Cellular i.e., U S Cellular and PLDT go up and down completely randomly.

Pair Corralation between U S Cellular and PLDT

Considering the 90-day investment horizon United States Cellular is expected to generate 1.18 times more return on investment than PLDT. However, U S Cellular is 1.18 times more volatile than PLDT Inc ADR. It trades about 0.1 of its potential returns per unit of risk. PLDT Inc ADR is currently generating about 0.02 per unit of risk. If you would invest  6,352  in United States Cellular on December 26, 2024 and sell it today you would earn a total of  572.00  from holding United States Cellular or generate 9.01% return on investment over 90 days.

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

United States Cellular  vs.  PLDT Inc ADR

United States Cellular

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in United States Cellular are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, U S Cellular may actually be approaching a critical reversion point that can send shares even higher in April 2025.

PLDT Inc ADR

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PLDT Inc ADR are ranked lower than 1 (%) 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 U S Cellular and PLDT

The main advantage of trading using opposite U S Cellular and PLDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U S Cellular 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 United States Cellular 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..