Correlation Between Gogo and PLDT

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

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

Diversification Opportunities for Gogo and PLDT

-0.82

Correlation Coefficient

Gogo  PLDT

Pay attention - limited upside

The 3 months correlation between Gogo and PLDT is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Gogo Inc 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 Gogo 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 Gogo Inc 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 Gogo i.e., Gogo and PLDT go up and down completely randomly.

Pair Corralation between Gogo and PLDT

Given the investment horizon of 90 days Gogo Inc is expected to generate 3.54 times more return on investment than PLDT. However, Gogo is 3.54 times more volatile than PLDT Inc ADR. It trades about 0.07 of its potential returns per unit of risk. PLDT Inc ADR is currently generating about -0.2 per unit of risk. If you would invest  687.00  in Gogo Inc on September 16, 2024 and sell it today you would earn a total of  103.00  from holding Gogo Inc or generate 14.99% return on investment over 90 days.

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

Gogo Inc  vs.  PLDT Inc ADR

Gogo Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gogo Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent technical and fundamental indicators, Gogo displayed solid returns over the last few months and may actually be approaching a breakup point.

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 January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Gogo and PLDT

The main advantage of trading using opposite Gogo and PLDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gogo 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 Gogo Inc 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.