Correlation Between Grupo Televisa and Fomento Economico
Can any of the company-specific risk be diversified away by investing in both Grupo Televisa and Fomento Economico 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 Fomento Economico 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 Fomento Economico Mexicano, you can compare the effects of market volatilities on Grupo Televisa and Fomento Economico 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 Fomento Economico. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Televisa and Fomento Economico.
Diversification Opportunities for Grupo Televisa and Fomento Economico
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grupo and Fomento is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Televisa SAB and Fomento Economico Mexicano in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fomento Economico 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 Fomento Economico. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fomento Economico has no effect on the direction of Grupo Televisa i.e., Grupo Televisa and Fomento Economico go up and down completely randomly.
Pair Corralation between Grupo Televisa and Fomento Economico
Allowing for the 90-day total investment horizon Grupo Televisa SAB is expected to generate 3.3 times more return on investment than Fomento Economico. However, Grupo Televisa is 3.3 times more volatile than Fomento Economico Mexicano. It trades about -0.02 of its potential returns per unit of risk. Fomento Economico Mexicano is currently generating about -0.4 per unit of risk. If you would invest 213.00 in Grupo Televisa SAB on August 26, 2024 and sell it today you would lose (6.00) from holding Grupo Televisa SAB or give up 2.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grupo Televisa SAB vs. Fomento Economico Mexicano
Performance |
| Timeline |
| Grupo Televisa SAB |
| Fomento Economico |
Grupo Televisa and Fomento Economico Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Televisa and Fomento Economico
The main advantage of trading using opposite Grupo Televisa and Fomento Economico positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Televisa position performs unexpectedly, Fomento Economico 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 Fomento Economico will offset losses from the drop in Fomento Economico's long position.| Grupo Televisa vs. Liberty Global PLC | Grupo Televisa vs. Liberty Global PLC | Grupo Televisa vs. Liberty Broadband Srs | Grupo Televisa vs. Shenandoah Telecommunications Co |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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