Correlation Between Grupo Televisa and Ucloudlink

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

Diversification Opportunities for Grupo Televisa and Ucloudlink

-0.54

Correlation Coefficient

Grupo Televisa  Ucloudlink

Excellent diversification

The 3 months correlation between Grupo and Ucloudlink is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Televisa SAB and Ucloudlink Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ucloudlink Group 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 Ucloudlink. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ucloudlink Group has no effect on the direction of Grupo Televisa i.e., Grupo Televisa and Ucloudlink go up and down completely randomly.

Pair Corralation between Grupo Televisa and Ucloudlink

Allowing for the 90-day total investment horizon Grupo Televisa SAB is expected to under-perform the Ucloudlink. But the stock apears to be less risky and, when comparing its historical volatility, Grupo Televisa SAB is 5.78 times less risky than Ucloudlink. The stock trades about 0.0 of its potential returns per unit of risk. The Ucloudlink Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  135.00  in Ucloudlink Group on November 28, 2024 and sell it today you would lose (15.00) from holding Ucloudlink Group or give up 11.11% of portfolio value over 90 days.

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

Grupo Televisa SAB  vs.  Ucloudlink Group

Grupo Televisa SAB

Risk-Adjusted Performance

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.

Ucloudlink Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ucloudlink Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile fundamental indicators, Ucloudlink disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grupo Televisa and Ucloudlink

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

The idea behind Grupo Televisa SAB and Ucloudlink Group 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.