Correlation Between Grupo Aeroportuario and Grupo Televisa

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Can any of the company-specific risk be diversified away by investing in both Grupo Aeroportuario and Grupo Televisa 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 Aeroportuario and Grupo Televisa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Aeroportuario del and Grupo Televisa SAB, you can compare the effects of market volatilities on Grupo Aeroportuario and Grupo Televisa 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 Aeroportuario with a short position of Grupo Televisa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Aeroportuario and Grupo Televisa.

Diversification Opportunities for Grupo Aeroportuario and Grupo Televisa

0.21
  Correlation Coefficient

Modest diversification

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

Pair Corralation between Grupo Aeroportuario and Grupo Televisa

Assuming the 90 days trading horizon Grupo Aeroportuario del is expected to generate 0.75 times more return on investment than Grupo Televisa. However, Grupo Aeroportuario del is 1.34 times less risky than Grupo Televisa. It trades about 0.02 of its potential returns per unit of risk. Grupo Televisa SAB is currently generating about -0.05 per unit of risk. If you would invest  46,449  in Grupo Aeroportuario del on August 31, 2024 and sell it today you would earn a total of  5,460  from holding Grupo Aeroportuario del or generate 11.75% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Grupo Aeroportuario del  vs.  Grupo Televisa SAB

 Performance 
       Timeline  
Grupo Aeroportuario del 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Grupo Aeroportuario del has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Grupo Aeroportuario is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.
Grupo Televisa SAB 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Televisa SAB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Grupo Televisa may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Grupo Aeroportuario and Grupo Televisa Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Grupo Aeroportuario and Grupo Televisa

The main advantage of trading using opposite Grupo Aeroportuario and Grupo Televisa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Aeroportuario position performs unexpectedly, Grupo Televisa 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 Grupo Televisa will offset losses from the drop in Grupo Televisa's long position.
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The idea behind Grupo Aeroportuario del and Grupo Televisa SAB 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

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