Correlation Between Rizal Commercial and PLDT

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

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

Diversification Opportunities for Rizal Commercial and PLDT

0.63

Correlation Coefficient

Rizal Commercial  PLDT

Poor diversification

The 3 months correlation between Rizal and PLDT is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Rizal Commercial Banking and PLDT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLDT Inc and Rizal Commercial 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 Rizal Commercial Banking 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 has no effect on the direction of Rizal Commercial i.e., Rizal Commercial and PLDT go up and down completely randomly.

Pair Corralation between Rizal Commercial and PLDT

Assuming the 90 days trading horizon Rizal Commercial Banking is expected to generate 1.25 times more return on investment than PLDT. However, Rizal Commercial is 1.25 times more volatile than PLDT Inc. It trades about 0.01 of its potential returns per unit of risk. PLDT Inc is currently generating about -0.04 per unit of risk. If you would invest  2,575  in Rizal Commercial Banking on April 24, 2025 and sell it today you would earn a total of  15.00  from holding Rizal Commercial Banking or generate 0.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Rizal Commercial Banking  vs.  PLDT Inc

Rizal Commercial Banking

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Rizal Commercial Banking are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Rizal Commercial is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

PLDT Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days PLDT Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, PLDT is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Rizal Commercial and PLDT

The main advantage of trading using opposite Rizal Commercial and PLDT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rizal Commercial 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 Rizal Commercial Banking and PLDT Inc 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 Managers module to screen money managers from public funds and ETFs managed around the world.