Correlation Between PLDT and Globalstar

Can any of the company-specific risk be diversified away by investing in both PLDT and Globalstar 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 Globalstar 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 Globalstar, you can compare the effects of market volatilities on PLDT and Globalstar 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 Globalstar. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLDT and Globalstar.

Diversification Opportunities for PLDT and Globalstar

-0.84

Correlation Coefficient

PLDT  Globalstar

Pay attention - limited upside

The 3 months correlation between PLDT and Globalstar is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding PLDT Inc ADR and Globalstar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globalstar 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 Globalstar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globalstar has no effect on the direction of PLDT i.e., PLDT and Globalstar go up and down completely randomly.

Pair Corralation between PLDT and Globalstar

Considering the 90-day investment horizon PLDT Inc ADR is expected to under-perform the Globalstar. But the stock apears to be less risky and, when comparing its historical volatility, PLDT Inc ADR is 4.82 times less risky than Globalstar. The stock trades about -0.15 of its potential returns per unit of risk. The Globalstar is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  128.00  in Globalstar on September 4, 2024 and sell it today you would earn a total of  82.00  from holding Globalstar or generate 64.06% 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.  Globalstar

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 conflicting 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.

Globalstar

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Globalstar are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Globalstar unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PLDT and Globalstar

The main advantage of trading using opposite PLDT and Globalstar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLDT position performs unexpectedly, Globalstar 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 Globalstar will offset losses from the drop in Globalstar's long position.

The idea behind PLDT Inc ADR and Globalstar 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.