Correlation Between Vodafone Group and PLDT

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

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

Diversification Opportunities for Vodafone Group and PLDT

0.47

Correlation Coefficient

Vodafone Group  PLDT

Very weak diversification

The 3 months correlation between Vodafone and PLDT is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Vodafone Group PLC 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 Vodafone Group 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 Vodafone Group PLC 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 Vodafone Group i.e., Vodafone Group and PLDT go up and down completely randomly.

Pair Corralation between Vodafone Group and PLDT

Considering the 90-day investment horizon Vodafone Group PLC is expected to generate 1.3 times more return on investment than PLDT. However, Vodafone Group is 1.3 times more volatile than PLDT Inc ADR. It trades about 0.12 of its potential returns per unit of risk. PLDT Inc ADR is currently generating about 0.07 per unit of risk. If you would invest  843.00  in Vodafone Group PLC on December 27, 2024 and sell it today you would earn a total of  93.00  from holding Vodafone Group PLC or generate 11.03% return on investment over 90 days.

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

Vodafone Group PLC  vs.  PLDT Inc ADR

Vodafone Group PLC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vodafone Group PLC are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, Vodafone Group may actually be approaching a critical reversion point that can send shares even higher in April 2025.

PLDT Inc ADR

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in PLDT Inc ADR are ranked lower than 5 (%) 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 Vodafone Group and PLDT

The main advantage of trading using opposite Vodafone Group and PLDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vodafone Group 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 Vodafone Group PLC 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.

Check out your portfolio center.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.