Correlation Between Grupo Media and DeVry Education

Can any of the company-specific risk be diversified away by investing in both Grupo Media and DeVry Education 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 DeVry Education 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 DeVry Education Group, you can compare the effects of market volatilities on Grupo Media and DeVry Education 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 DeVry Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Media and DeVry Education.

Diversification Opportunities for Grupo Media and DeVry Education

0.45

Correlation Coefficient

Grupo Media  DeVry Education

Very weak diversification

The 3 months correlation between Grupo and DeVry is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Media Capital and DeVry Education Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DeVry Education Group 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 DeVry Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DeVry Education Group has no effect on the direction of Grupo Media i.e., Grupo Media and DeVry Education go up and down completely randomly.

Pair Corralation between Grupo Media and DeVry Education

If you would invest  8,250  in DeVry Education Group on October 8, 2024 and sell it today you would earn a total of  750.00  from holding DeVry Education Group or generate 9.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	97.37%
Values	Daily Returns

Grupo Media Capital  vs.  DeVry Education Group

Grupo Media Capital

Risk-Adjusted Performance

0 of 100

OK

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 fragile basic indicators, Grupo Media may actually be approaching a critical reversion point that can send shares even higher in February 2025.

DeVry Education Group

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in DeVry Education Group are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, DeVry Education reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grupo Media and DeVry Education

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

The idea behind Grupo Media Capital and DeVry Education Group 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.