Correlation Between Grupo Carso and TEGNA

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

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

Diversification Opportunities for Grupo Carso and TEGNA

-0.32

Correlation Coefficient

Grupo Carso  TEGNA

Very good diversification

The 3 months correlation between Grupo and TEGNA is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Carso SAB and TEGNA Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TEGNA Inc and Grupo Carso 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 Grupo Carso SAB are associated (or correlated) with TEGNA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TEGNA Inc has no effect on the direction of Grupo Carso i.e., Grupo Carso and TEGNA go up and down completely randomly.

Pair Corralation between Grupo Carso and TEGNA

Assuming the 90 days horizon Grupo Carso SAB is expected to under-perform the TEGNA. But the stock apears to be less risky and, when comparing its historical volatility, Grupo Carso SAB is 1.38 times less risky than TEGNA. The stock trades about -0.33 of its potential returns per unit of risk. The TEGNA Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,770  in TEGNA Inc on October 10, 2024 and sell it today you would earn a total of  10.00  from holding TEGNA Inc or generate 0.56% return on investment over 90 days.

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

Grupo Carso SAB  vs.  TEGNA Inc

Grupo Carso SAB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grupo Carso SAB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

TEGNA Inc

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TEGNA Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TEGNA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grupo Carso and TEGNA

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

The idea behind Grupo Carso SAB and TEGNA 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.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.