Correlation Between Grupo Televisa and Major League

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

Diversification Opportunities for Grupo Televisa and Major League

0.0

Correlation Coefficient

Grupo Televisa  Major League

Pay attention - limited upside

The 3 months correlation between Grupo and Major is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Televisa SAB and Major League Football in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Major League Football 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 Major League. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Major League Football has no effect on the direction of Grupo Televisa i.e., Grupo Televisa and Major League go up and down completely randomly.

Pair Corralation between Grupo Televisa and Major League

Allowing for the 90-day total investment horizon Grupo Televisa SAB is expected to generate 0.3 times more return on investment than Major League. However, Grupo Televisa SAB is 3.31 times less risky than Major League. It trades about 0.07 of its potential returns per unit of risk. Major League Football is currently generating about -0.13 per unit of risk. If you would invest  177.00  in Grupo Televisa SAB on September 5, 2024 and sell it today you would earn a total of  23.00  from holding Grupo Televisa SAB or generate 12.99% return on investment over 90 days.

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

Grupo Televisa SAB  vs.  Major League Football

Grupo Televisa SAB

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Televisa SAB are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Grupo Televisa showed solid returns over the last few months and may actually be approaching a breakup point.

Major League Football

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Major League Football has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Grupo Televisa and Major League

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

The idea behind Grupo Televisa SAB and Major League Football 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..