Correlation Between Grupo Televisa and BBB Foods

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

Diversification Opportunities for Grupo Televisa and BBB Foods

-0.3

Correlation Coefficient

Grupo Televisa  BBB Foods

Very good diversification

The 3 months correlation between Grupo and BBB is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Televisa SAB and BBB Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBB Foods 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 BBB Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBB Foods has no effect on the direction of Grupo Televisa i.e., Grupo Televisa and BBB Foods go up and down completely randomly.

Pair Corralation between Grupo Televisa and BBB Foods

Assuming the 90 days horizon Grupo Televisa SAB is expected to generate 0.83 times more return on investment than BBB Foods. However, Grupo Televisa SAB is 1.2 times less risky than BBB Foods. It trades about -0.04 of its potential returns per unit of risk. BBB Foods is currently generating about -0.07 per unit of risk. If you would invest  38.00  in Grupo Televisa SAB on December 24, 2024 and sell it today you would lose (2.00) from holding Grupo Televisa SAB or give up 5.26% of portfolio value over 90 days.

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

Grupo Televisa SAB  vs.  BBB Foods

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 nearly stable technical and fundamental indicators, Grupo Televisa is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

BBB Foods

Risk-Adjusted Performance

Very Weak

Over the last 90 days BBB Foods has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Grupo Televisa and BBB Foods

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

The idea behind Grupo Televisa SAB and BBB Foods 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..