Correlation Between PLDT and MREIT

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

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

Diversification Opportunities for PLDT and MREIT

-0.47

Correlation Coefficient

PLDT  MREIT

Very good diversification

The 3 months correlation between PLDT and MREIT is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding PLDT Inc and MREIT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MREIT Inc 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 are associated (or correlated) with MREIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MREIT Inc has no effect on the direction of PLDT i.e., PLDT and MREIT go up and down completely randomly.

Pair Corralation between PLDT and MREIT

Assuming the 90 days trading horizon PLDT Inc is expected to under-perform the MREIT. In addition to that, PLDT is 2.15 times more volatile than MREIT Inc. It trades about -0.01 of its total potential returns per unit of risk. MREIT Inc is currently generating about 0.2 per unit of volatility. If you would invest  1,345  in MREIT Inc on April 25, 2025 and sell it today you would earn a total of  95.00  from holding MREIT Inc or generate 7.06% return on investment over 90 days.

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

PLDT Inc  vs.  MREIT Inc

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.

MREIT Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MREIT Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady technical and fundamental indicators, MREIT may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with PLDT and MREIT

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

The idea behind PLDT Inc and MREIT 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.