Correlation Between TV Azteca and TV Asahi

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

Diversification Opportunities for TV Azteca and TV Asahi

-0.27
  Correlation Coefficient

Very good diversification

The 3 months correlation between AZTEF and THDDY is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding TV Azteca SAB and TV Asahi Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TV Asahi Holdings and TV Azteca 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 TV Azteca SAB are associated (or correlated) with TV Asahi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TV Asahi Holdings has no effect on the direction of TV Azteca i.e., TV Azteca and TV Asahi go up and down completely randomly.

Pair Corralation between TV Azteca and TV Asahi

Assuming the 90 days horizon TV Azteca SAB is expected to generate 27.83 times more return on investment than TV Asahi. However, TV Azteca is 27.83 times more volatile than TV Asahi Holdings. It trades about 0.07 of its potential returns per unit of risk. TV Asahi Holdings is currently generating about 0.04 per unit of risk. If you would invest  0.01  in TV Azteca SAB on September 14, 2024 and sell it today you would earn a total of  0.02  from holding TV Azteca SAB or generate 200.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

TV Azteca SAB  vs.  TV Asahi Holdings

 Performance 
       Timeline  
TV Azteca SAB 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in TV Azteca SAB are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, TV Azteca reported solid returns over the last few months and may actually be approaching a breakup point.
TV Asahi Holdings 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days TV Asahi Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, TV Asahi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

TV Azteca and TV Asahi Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with TV Azteca and TV Asahi

The main advantage of trading using opposite TV Azteca and TV Asahi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TV Azteca position performs unexpectedly, TV Asahi 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 TV Asahi will offset losses from the drop in TV Asahi's long position.
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The idea behind TV Azteca SAB and TV Asahi Holdings 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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Check out your portfolio center.
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

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