Correlation Between Grupo Televisa and PEPSICO

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

Diversification Opportunities for Grupo Televisa and PEPSICO

0.63

Correlation Coefficient

Grupo Televisa  PEPSICO

Poor diversification

The 3 months correlation between Grupo and PEPSICO is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Televisa SAB and PEPSICO INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEPSICO INC 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 PEPSICO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEPSICO INC has no effect on the direction of Grupo Televisa i.e., Grupo Televisa and PEPSICO go up and down completely randomly.

Pair Corralation between Grupo Televisa and PEPSICO

Allowing for the 90-day total investment horizon Grupo Televisa SAB is expected to under-perform the PEPSICO. But the stock apears to be less risky and, when comparing its historical volatility, Grupo Televisa SAB is 1.56 times less risky than PEPSICO. The stock trades about -0.36 of its potential returns per unit of risk. The PEPSICO INC is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  7,938  in PEPSICO INC on October 5, 2024 and sell it today you would earn a total of  437.00  from holding PEPSICO INC or generate 5.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	90.48%
Values	Daily Returns

Grupo Televisa SAB  vs.  PEPSICO INC

Grupo Televisa SAB

Risk-Adjusted Performance

0 of 100

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 unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

PEPSICO INC

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PEPSICO INC are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, PEPSICO is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Grupo Televisa and PEPSICO

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

The idea behind Grupo Televisa SAB and PEPSICO INC 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.