Correlation Between Eltek and PLDT

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

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

Diversification Opportunities for Eltek and PLDT

0.15

Correlation Coefficient

Eltek  PLDT

Average diversification

The 3 months correlation between Eltek and PLDT is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Eltek 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 Eltek 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 Eltek 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 Eltek i.e., Eltek and PLDT go up and down completely randomly.

Pair Corralation between Eltek and PLDT

Given the investment horizon of 90 days Eltek is expected to generate 1.67 times more return on investment than PLDT. However, Eltek is 1.67 times more volatile than PLDT Inc ADR. It trades about -0.01 of its potential returns per unit of risk. PLDT Inc ADR is currently generating about -0.03 per unit of risk. If you would invest  1,060  in Eltek on May 16, 2025 and sell it today you would lose (20.00) from holding Eltek or give up 1.89% of portfolio value over 90 days.

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

Eltek  vs.  PLDT Inc ADR

Eltek

Risk-Adjusted Performance

Weakest

Over the last 90 days Eltek has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Eltek is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

PLDT Inc ADR

Risk-Adjusted Performance

Weakest

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 Eltek and PLDT

The main advantage of trading using opposite Eltek and PLDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eltek 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 Eltek 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.

Check out your portfolio center.

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 AI Portfolio Prophet module to use AI to generate optimal portfolios and find profitable investment opportunities.