Correlation Between Grupo Televisa and Biglari Holdings

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

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

Diversification Opportunities for Grupo Televisa and Biglari Holdings

-0.45

Correlation Coefficient

Grupo Televisa  Biglari Holdings

Very good diversification

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

Pair Corralation between Grupo Televisa and Biglari Holdings

Assuming the 90 days horizon Grupo Televisa SAB is expected to generate 0.56 times more return on investment than Biglari Holdings. However, Grupo Televisa SAB is 1.8 times less risky than Biglari Holdings. It trades about 0.1 of its potential returns per unit of risk. Biglari Holdings is currently generating about 0.01 per unit of risk. If you would invest  35.00  in Grupo Televisa SAB on December 4, 2024 and sell it today you would earn a total of  1.00  from holding Grupo Televisa SAB or generate 2.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Grupo Televisa SAB  vs.  Biglari Holdings

Grupo Televisa SAB

Risk-Adjusted Performance

Very Weak

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

Biglari Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Biglari Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, Biglari Holdings is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Grupo Televisa and Biglari Holdings

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

The idea behind Grupo Televisa SAB and Biglari Holdings 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.