Correlation Between Grupo Televisa and Mesa Air

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

Diversification Opportunities for Grupo Televisa and Mesa Air

0.04

Correlation Coefficient

Grupo Televisa  Mesa Air

Significant diversification

The 3 months correlation between Grupo and Mesa is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Televisa SAB and Mesa Air Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mesa Air Group 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 Mesa Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mesa Air Group has no effect on the direction of Grupo Televisa i.e., Grupo Televisa and Mesa Air go up and down completely randomly.

Pair Corralation between Grupo Televisa and Mesa Air

Allowing for the 90-day total investment horizon Grupo Televisa SAB is expected to under-perform the Mesa Air. But the stock apears to be less risky and, when comparing its historical volatility, Grupo Televisa SAB is 2.03 times less risky than Mesa Air. The stock trades about -0.17 of its potential returns per unit of risk. The Mesa Air Group is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  85.00  in Mesa Air Group on September 17, 2024 and sell it today you would earn a total of  22.00  from holding Mesa Air Group or generate 25.88% return on investment over 90 days.

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

Grupo Televisa SAB  vs.  Mesa Air Group

Grupo Televisa SAB

Risk-Adjusted Performance

0 of 100

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.

Mesa Air Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mesa Air Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators 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 Mesa Air

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

The idea behind Grupo Televisa SAB and Mesa Air Group 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 Global Correlations module to find global opportunities by holding instruments from different markets.