Correlation Between SkyWest and Grupo Televisa

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

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

Diversification Opportunities for SkyWest and Grupo Televisa

0.27

Correlation Coefficient

SkyWest  Grupo Televisa

Modest diversification

The 3 months correlation between SkyWest and Grupo is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding SkyWest 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 SkyWest 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 SkyWest 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 SkyWest i.e., SkyWest and Grupo Televisa go up and down completely randomly.

Pair Corralation between SkyWest and Grupo Televisa

Given the investment horizon of 90 days SkyWest is expected to generate 0.72 times more return on investment than Grupo Televisa. However, SkyWest is 1.38 times less risky than Grupo Televisa. It trades about 0.08 of its potential returns per unit of risk. Grupo Televisa SAB is currently generating about -0.04 per unit of risk. If you would invest  6,667  in SkyWest on December 5, 2024 and sell it today you would earn a total of  2,978  from holding SkyWest or generate 44.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

SkyWest  vs.  Grupo Televisa SAB

SkyWest

Risk-Adjusted Performance

Very Weak

Over the last 90 days SkyWest has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated 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. In spite of fairly stable basic indicators, Grupo Televisa is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with SkyWest and Grupo Televisa

The main advantage of trading using opposite SkyWest and Grupo Televisa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SkyWest 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 SkyWest 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.