Correlation Between IShares MSCI and PLDT

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

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

Diversification Opportunities for IShares MSCI and PLDT

-0.24

Correlation Coefficient

IShares MSCI  PLDT

Very good diversification

The 3 months correlation between IShares and PLDT is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI Qatar 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 IShares MSCI 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 iShares MSCI Qatar 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 IShares MSCI i.e., IShares MSCI and PLDT go up and down completely randomly.

Pair Corralation between IShares MSCI and PLDT

Considering the 90-day investment horizon iShares MSCI Qatar is expected to under-perform the PLDT. But the etf apears to be less risky and, when comparing its historical volatility, iShares MSCI Qatar is 3.05 times less risky than PLDT. The etf trades about -0.15 of its potential returns per unit of risk. The PLDT Inc ADR is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2,217  in PLDT Inc ADR on March 4, 2024 and sell it today you would earn a total of  308.00  from holding PLDT Inc ADR or generate 13.89% return on investment over 90 days.

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

iShares MSCI Qatar  vs.  PLDT Inc ADR

iShares MSCI Qatar

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days iShares MSCI Qatar has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Etf's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

PLDT Inc ADR

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PLDT Inc ADR are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating technical indicators, PLDT demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IShares MSCI and PLDT

The main advantage of trading using opposite IShares MSCI and PLDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI 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 iShares MSCI Qatar 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.