Correlation Between Scholastic and Grupo Televisa

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

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

Diversification Opportunities for Scholastic and Grupo Televisa

0.74

Correlation Coefficient

Scholastic  Grupo Televisa

Poor diversification

The 3 months correlation between Scholastic and Grupo is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Scholastic 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 Scholastic 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 Scholastic 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 Scholastic i.e., Scholastic and Grupo Televisa go up and down completely randomly.

Pair Corralation between Scholastic and Grupo Televisa

Given the investment horizon of 90 days Scholastic is expected to under-perform the Grupo Televisa. In addition to that, Scholastic is 1.71 times more volatile than Grupo Televisa SAB. It trades about -0.06 of its total potential returns per unit of risk. Grupo Televisa SAB is currently generating about -0.07 per unit of volatility. If you would invest  40.00  in Grupo Televisa SAB on December 3, 2024 and sell it today you would lose (4.00) from holding Grupo Televisa SAB or give up 10.0% of portfolio value over 90 days.

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

Scholastic  vs.  Grupo Televisa SAB

Scholastic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Scholastic has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

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.

Pair Trading with Scholastic and Grupo Televisa

The main advantage of trading using opposite Scholastic and Grupo Televisa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scholastic 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 Scholastic 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.