Correlation Between Black Hills and Grupo Televisa

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

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

Diversification Opportunities for Black Hills and Grupo Televisa

-0.18

Correlation Coefficient

Black Hills  Grupo Televisa

Good diversification

The 3 months correlation between Black and Grupo is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Black Hills and Grupo Televisa SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grupo Televisa SAB and Black Hills 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 Black Hills are associated (or correlated) with Grupo Televisa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grupo Televisa SAB has no effect on the direction of Black Hills i.e., Black Hills and Grupo Televisa go up and down completely randomly.

Pair Corralation between Black Hills and Grupo Televisa

Considering the 90-day investment horizon Black Hills is expected to generate 0.53 times more return on investment than Grupo Televisa. However, Black Hills is 1.9 times less risky than Grupo Televisa. It trades about -0.34 of its potential returns per unit of risk. Grupo Televisa SAB is currently generating about -0.35 per unit of risk. If you would invest  6,192  in Black Hills on October 7, 2024 and sell it today you would lose (413.00) from holding Black Hills or give up 6.67% of portfolio value over 90 days.

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

Black Hills  vs.  Grupo Televisa SAB

Black Hills

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Black Hills has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward-looking signals, Black Hills is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Grupo Televisa SAB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grupo Televisa SAB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Black Hills and Grupo Televisa

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

The idea behind Black Hills and Grupo Televisa SAB 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.