Correlation Between PLDT and ASE Industrial

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

Diversification Opportunities for PLDT and ASE Industrial

-0.6

Correlation Coefficient

PLDT  ASE Industrial

Excellent diversification

The 3 months correlation between PLDT and ASE is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding PLDT Inc ADR and ASE Industrial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASE Industrial Holding 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 ASE Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASE Industrial Holding has no effect on the direction of PLDT i.e., PLDT and ASE Industrial go up and down completely randomly.

Pair Corralation between PLDT and ASE Industrial

Considering the 90-day investment horizon PLDT Inc ADR is expected to under-perform the ASE Industrial. But the stock apears to be less risky and, when comparing its historical volatility, PLDT Inc ADR is 1.53 times less risky than ASE Industrial. The stock trades about -0.02 of its potential returns per unit of risk. The ASE Industrial Holding is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  840.00  in ASE Industrial Holding on May 1, 2025 and sell it today you would earn a total of  208.00  from holding ASE Industrial Holding or generate 24.76% return on investment over 90 days.

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

PLDT Inc ADR  vs.  ASE Industrial Holding

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.

ASE Industrial Holding

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ASE Industrial Holding are ranked lower than 16 (%) 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.

Pair Trading with PLDT and ASE Industrial

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

The idea behind PLDT Inc ADR and ASE Industrial Holding 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.