Correlation Between Grupo Televisa and GMS

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

Diversification Opportunities for Grupo Televisa and GMS

-0.14

Correlation Coefficient

Grupo Televisa  GMS

Good diversification

The 3 months correlation between Grupo and GMS is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Televisa SAB and GMS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMS Inc 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 GMS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMS Inc has no effect on the direction of Grupo Televisa i.e., Grupo Televisa and GMS go up and down completely randomly.

Pair Corralation between Grupo Televisa and GMS

Allowing for the 90-day total investment horizon Grupo Televisa SAB is expected to under-perform the GMS. In addition to that, Grupo Televisa is 1.89 times more volatile than GMS Inc. It trades about -0.02 of its total potential returns per unit of risk. GMS Inc is currently generating about 0.06 per unit of volatility. If you would invest  6,304  in GMS Inc on September 26, 2024 and sell it today you would earn a total of  2,376  from holding GMS Inc or generate 37.69% return on investment over 90 days.

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

Grupo Televisa SAB  vs.  GMS Inc

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 unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

GMS Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GMS Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, GMS is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Grupo Televisa and GMS

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

The idea behind Grupo Televisa SAB and GMS Inc 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.