Correlation Between Grupo Televisa and Stereo Vision

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

Diversification Opportunities for Grupo Televisa and Stereo Vision

0.21

Correlation Coefficient

Grupo Televisa  Stereo Vision

Modest diversification

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

Pair Corralation between Grupo Televisa and Stereo Vision

Allowing for the 90-day total investment horizon Grupo Televisa is expected to generate 23.24 times less return on investment than Stereo Vision. But when comparing it to its historical volatility, Grupo Televisa SAB is 4.77 times less risky than Stereo Vision. It trades about 0.04 of its potential returns per unit of risk. Stereo Vision Entertainment is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  0.02  in Stereo Vision Entertainment on December 2, 2024 and sell it today you would earn a total of  0.01  from holding Stereo Vision Entertainment or generate 50.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Grupo Televisa SAB  vs.  Stereo Vision Entertainment

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.

Stereo Vision Entert

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stereo Vision Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of sluggish performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Grupo Televisa and Stereo Vision

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

The idea behind Grupo Televisa SAB and Stereo Vision Entertainment 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.