Correlation Between Grupo Televisa and Transocean

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

Diversification Opportunities for Grupo Televisa and Transocean

-0.21

Correlation Coefficient

Grupo Televisa  Transocean

Very good diversification

The 3 months correlation between Grupo and Transocean is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Televisa SAB and Transocean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transocean 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 Transocean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transocean has no effect on the direction of Grupo Televisa i.e., Grupo Televisa and Transocean go up and down completely randomly.

Pair Corralation between Grupo Televisa and Transocean

Allowing for the 90-day total investment horizon Grupo Televisa SAB is expected to generate 0.86 times more return on investment than Transocean. However, Grupo Televisa SAB is 1.17 times less risky than Transocean. It trades about 0.0 of its potential returns per unit of risk. Transocean is currently generating about -0.03 per unit of risk. If you would invest  177.00  in Grupo Televisa SAB on December 20, 2024 and sell it today you would lose (5.00) from holding Grupo Televisa SAB or give up 2.82% of portfolio value over 90 days.

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

Grupo Televisa SAB  vs.  Transocean

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.

Transocean

Risk-Adjusted Performance

Very Weak

Over the last 90 days Transocean has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, Transocean is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Grupo Televisa and Transocean

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

The idea behind Grupo Televisa SAB and Transocean 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.