Correlation Between Grupo Media and Cheniere Energy

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

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

Diversification Opportunities for Grupo Media and Cheniere Energy

0.0

Correlation Coefficient

Grupo Media  Cheniere Energy

Pay attention - limited upside

The 3 months correlation between Grupo and Cheniere is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Media Capital and Cheniere Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheniere Energy and Grupo Media 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 Media Capital are associated (or correlated) with Cheniere Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheniere Energy has no effect on the direction of Grupo Media i.e., Grupo Media and Cheniere Energy go up and down completely randomly.

Pair Corralation between Grupo Media and Cheniere Energy

If you would invest  19,915  in Cheniere Energy on December 23, 2024 and sell it today you would earn a total of  1,345  from holding Cheniere Energy or generate 6.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Grupo Media Capital  vs.  Cheniere Energy

Grupo Media Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grupo Media Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Grupo Media is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Cheniere Energy

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cheniere Energy are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Cheniere Energy may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Grupo Media and Cheniere Energy

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

The idea behind Grupo Media Capital and Cheniere Energy 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.