Correlation Between Grupo Televisa and Sapiens International

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

Diversification Opportunities for Grupo Televisa and Sapiens International

0.65

Correlation Coefficient

Grupo Televisa  Sapiens International

Poor diversification

The 3 months correlation between Grupo and Sapiens is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Televisa SAB and Sapiens International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sapiens International 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 Sapiens International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sapiens International has no effect on the direction of Grupo Televisa i.e., Grupo Televisa and Sapiens International go up and down completely randomly.

Pair Corralation between Grupo Televisa and Sapiens International

Allowing for the 90-day total investment horizon Grupo Televisa SAB is expected to generate 1.01 times more return on investment than Sapiens International. However, Grupo Televisa is 1.01 times more volatile than Sapiens International. It trades about 0.02 of its potential returns per unit of risk. Sapiens International is currently generating about -0.08 per unit of risk. If you would invest  196.00  in Grupo Televisa SAB on September 15, 2024 and sell it today you would earn a total of  1.00  from holding Grupo Televisa SAB or generate 0.51% return on investment over 90 days.

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

Grupo Televisa SAB  vs.  Sapiens International

Grupo Televisa SAB

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Televisa SAB are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Sapiens International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sapiens International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Grupo Televisa and Sapiens International

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

The idea behind Grupo Televisa SAB and Sapiens International 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.