Correlation Between PLDT and T Mobile

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

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

Diversification Opportunities for PLDT and T Mobile

-0.88

Correlation Coefficient

PLDT  T Mobile

Pay attention - limited upside

The 3 months correlation between PLDT and TMUS is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding PLDT Inc ADR and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile 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 ADR are associated (or correlated) with T Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Mobile has no effect on the direction of PLDT i.e., PLDT and T Mobile go up and down completely randomly.

Pair Corralation between PLDT and T Mobile

Considering the 90-day investment horizon PLDT Inc ADR is expected to under-perform the T Mobile. In addition to that, PLDT is 1.62 times more volatile than T Mobile. It trades about -0.23 of its total potential returns per unit of risk. T Mobile is currently generating about 0.51 per unit of volatility. If you would invest  22,236  in T Mobile on September 1, 2024 and sell it today you would earn a total of  2,458  from holding T Mobile or generate 11.05% return on investment over 90 days.

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

PLDT Inc ADR  vs.  T Mobile

PLDT Inc ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PLDT Inc ADR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in December 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

T Mobile

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in T Mobile are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, T Mobile unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PLDT and T Mobile

The main advantage of trading using opposite PLDT and T Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLDT position performs unexpectedly, T Mobile 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 T Mobile will offset losses from the drop in T Mobile's long position.

The idea behind PLDT Inc ADR and T Mobile 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.