Correlation Between Cosan SA and PLDT

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

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

Diversification Opportunities for Cosan SA and PLDT

0.19

Correlation Coefficient

Cosan SA  PLDT

Average diversification

The 3 months correlation between Cosan and PLDT is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Cosan SA ADR 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 Cosan SA 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 Cosan SA ADR 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 Cosan SA i.e., Cosan SA and PLDT go up and down completely randomly.

Pair Corralation between Cosan SA and PLDT

Given the investment horizon of 90 days Cosan SA ADR is expected to under-perform the PLDT. In addition to that, Cosan SA is 2.7 times more volatile than PLDT Inc ADR. It trades about -0.11 of its total potential returns per unit of risk. PLDT Inc ADR is currently generating about -0.01 per unit of volatility. If you would invest  2,319  in PLDT Inc ADR on April 29, 2025 and sell it today you would lose (19.00) from holding PLDT Inc ADR or give up 0.82% of portfolio value over 90 days.

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

Cosan SA ADR  vs.  PLDT Inc ADR

Cosan SA ADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cosan SA ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in August 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

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 Cosan SA and PLDT

The main advantage of trading using opposite Cosan SA and PLDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cosan SA 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 Cosan SA ADR 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.