Correlation Between ASE Industrial and PLDT

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

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

Diversification Opportunities for ASE Industrial and PLDT

-0.58

Correlation Coefficient

ASE Industrial  PLDT

Excellent diversification

The 3 months correlation between ASE and PLDT is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding ASE Industrial Holding 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 ASE Industrial 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 ASE Industrial Holding 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 ASE Industrial i.e., ASE Industrial and PLDT go up and down completely randomly.

Pair Corralation between ASE Industrial and PLDT

Considering the 90-day investment horizon ASE Industrial Holding is expected to generate 1.47 times more return on investment than PLDT. However, ASE Industrial is 1.47 times more volatile than PLDT Inc ADR. It trades about 0.16 of its potential returns per unit of risk. PLDT Inc ADR is currently generating about -0.02 per unit of risk. If you would invest  878.00  in ASE Industrial Holding on May 2, 2025 and sell it today you would earn a total of  155.00  from holding ASE Industrial Holding or generate 17.65% return on investment over 90 days.

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

ASE Industrial Holding  vs.  PLDT Inc ADR

ASE Industrial Holding

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ASE Industrial Holding are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, ASE Industrial showed solid returns over the last few months and may actually be approaching a breakup point.

PLDT Inc ADR

Risk-Adjusted Performance

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 fairly strong technical indicators, PLDT is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with ASE Industrial and PLDT

The main advantage of trading using opposite ASE Industrial and PLDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASE Industrial 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 ASE Industrial Holding 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.