Correlation Between SFL and Grupo Televisa
Can any of the company-specific risk be diversified away by investing in both SFL 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 SFL and Grupo Televisa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SFL Corporation and Grupo Televisa SAB, you can compare the effects of market volatilities on SFL 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 SFL with a short position of Grupo Televisa. Check out your portfolio center. Please also check ongoing floating volatility patterns of SFL and Grupo Televisa.
Diversification Opportunities for SFL and Grupo Televisa
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SFL and Grupo is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding SFL Corp. 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 SFL 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 SFL Corporation 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 SFL i.e., SFL and Grupo Televisa go up and down completely randomly.
Pair Corralation between SFL and Grupo Televisa
Considering the 90-day investment horizon SFL Corporation is expected to generate 0.53 times more return on investment than Grupo Televisa. However, SFL Corporation is 1.9 times less risky than Grupo Televisa. It trades about 0.01 of its potential returns per unit of risk. Grupo Televisa SAB is currently generating about -0.02 per unit of risk. If you would invest 1,025 in SFL Corporation on September 3, 2024 and sell it today you would earn a total of 20.00 from holding SFL Corporation or generate 1.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SFL Corp. vs. Grupo Televisa SAB
Performance |
| Timeline |
| SFL Corporation |
| Grupo Televisa SAB |
SFL and Grupo Televisa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SFL and Grupo Televisa
The main advantage of trading using opposite SFL and Grupo Televisa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SFL 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 SFL Corporation 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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