Correlation Between IQIYI and Grupo Televisa
Can any of the company-specific risk be diversified away by investing in both IQIYI 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 IQIYI and Grupo Televisa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iQIYI Inc and Grupo Televisa SAB, you can compare the effects of market volatilities on IQIYI 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 IQIYI with a short position of Grupo Televisa. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQIYI and Grupo Televisa.
Diversification Opportunities for IQIYI and Grupo Televisa
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IQIYI and Grupo is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding iQIYI Inc 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 IQIYI 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 iQIYI Inc 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 IQIYI i.e., IQIYI and Grupo Televisa go up and down completely randomly.
Pair Corralation between IQIYI and Grupo Televisa
Allowing for the 90-day total investment horizon iQIYI Inc is expected to under-perform the Grupo Televisa. But the stock apears to be less risky and, when comparing its historical volatility, iQIYI Inc is 1.21 times less risky than Grupo Televisa. The stock trades about -0.17 of its potential returns per unit of risk. The Grupo Televisa SAB is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 229.00 in Grupo Televisa SAB on August 24, 2024 and sell it today you would lose (23.00) from holding Grupo Televisa SAB or give up 10.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
iQIYI Inc vs. Grupo Televisa SAB
Performance |
| Timeline |
| iQIYI Inc |
| Grupo Televisa SAB |
IQIYI and Grupo Televisa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IQIYI and Grupo Televisa
The main advantage of trading using opposite IQIYI and Grupo Televisa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQIYI 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.The idea behind iQIYI Inc 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.| Grupo Televisa vs. Orange SA ADR | Grupo Televisa vs. Telefonica Brasil SA | Grupo Televisa vs. Telefonica SA ADR | Grupo Televisa vs. Liberty Broadband Srs |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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