Correlation Between Grupo Televisa and Advantage Solutions

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

Diversification Opportunities for Grupo Televisa and Advantage Solutions

-0.63

Correlation Coefficient

Grupo Televisa  Advantage Solutions

Excellent diversification

The 3 months correlation between Grupo and Advantage is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Televisa SAB and Advantage Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantage Solutions 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 Advantage Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantage Solutions has no effect on the direction of Grupo Televisa i.e., Grupo Televisa and Advantage Solutions go up and down completely randomly.

Pair Corralation between Grupo Televisa and Advantage Solutions

Allowing for the 90-day total investment horizon Grupo Televisa SAB is expected to under-perform the Advantage Solutions. In addition to that, Grupo Televisa is 1.1 times more volatile than Advantage Solutions. It trades about -0.15 of its total potential returns per unit of risk. Advantage Solutions is currently generating about 0.03 per unit of volatility. If you would invest  343.00  in Advantage Solutions on August 30, 2024 and sell it today you would earn a total of  8.00  from holding Advantage Solutions or generate 2.33% return on investment over 90 days.

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

Grupo Televisa SAB  vs.  Advantage Solutions

Grupo Televisa SAB

Risk-Adjusted Performance

0 of 100

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 latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Advantage Solutions

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Advantage Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Advantage Solutions 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 Grupo Televisa and Advantage Solutions

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

The idea behind Grupo Televisa SAB and Advantage Solutions 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.