Correlation Between Grupo Televisa and TIM Participacoes

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

Diversification Opportunities for Grupo Televisa and TIM Participacoes

0.48

Correlation Coefficient

Grupo Televisa  TIM Participacoes

Very weak diversification

The 3 months correlation between Grupo and TIM is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Televisa SAB and TIM Participacoes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TIM Participacoes 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 TIM Participacoes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TIM Participacoes has no effect on the direction of Grupo Televisa i.e., Grupo Televisa and TIM Participacoes go up and down completely randomly.

Pair Corralation between Grupo Televisa and TIM Participacoes

Allowing for the 90-day total investment horizon Grupo Televisa is expected to generate 4.34 times less return on investment than TIM Participacoes. In addition to that, Grupo Televisa is 1.43 times more volatile than TIM Participacoes SA. It trades about 0.04 of its total potential returns per unit of risk. TIM Participacoes SA is currently generating about 0.23 per unit of volatility. If you would invest  1,153  in TIM Participacoes SA on December 26, 2024 and sell it today you would earn a total of  360.00  from holding TIM Participacoes SA or generate 31.22% return on investment over 90 days.

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

Grupo Televisa SAB  vs.  TIM Participacoes SA

Grupo Televisa SAB

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Televisa SAB are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Grupo Televisa may actually be approaching a critical reversion point that can send shares even higher in April 2025.

TIM Participacoes

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TIM Participacoes SA are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating primary indicators, TIM Participacoes sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grupo Televisa and TIM Participacoes

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

The idea behind Grupo Televisa SAB and TIM Participacoes SA 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 Directory module to find actively traded commodities issued by global exchanges.