Correlation Between Vodafone Group and Grupo Televisa
Can any of the company-specific risk be diversified away by investing in both Vodafone Group 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 Vodafone Group and Grupo Televisa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vodafone Group PLC and Grupo Televisa SAB, you can compare the effects of market volatilities on Vodafone Group 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 Vodafone Group with a short position of Grupo Televisa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vodafone Group and Grupo Televisa.
Diversification Opportunities for Vodafone Group and Grupo Televisa
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Vodafone and Grupo is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Vodafone Group PLC 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 Vodafone Group 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 Vodafone Group PLC 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 Vodafone Group i.e., Vodafone Group and Grupo Televisa go up and down completely randomly.
Pair Corralation between Vodafone Group and Grupo Televisa
Considering the 90-day investment horizon Vodafone Group is expected to generate 1.13 times less return on investment than Grupo Televisa. But when comparing it to its historical volatility, Vodafone Group PLC is 2.0 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 0.01 of returns per unit of risk over similar time horizon. If you would invest 225.00 in Grupo Televisa SAB on August 24, 2024 and sell it today you would lose (17.50) from holding Grupo Televisa SAB or give up 7.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Vodafone Group PLC vs. Grupo Televisa SAB
Performance |
| Timeline |
| Vodafone Group PLC |
| Grupo Televisa SAB |
Vodafone Group and Grupo Televisa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vodafone Group and Grupo Televisa
The main advantage of trading using opposite Vodafone Group and Grupo Televisa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vodafone Group 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.| Vodafone Group vs. Eshallgo Class A | Vodafone Group vs. Amtech Systems | Vodafone Group vs. Gold Fields Ltd | Vodafone Group vs. Aegean Airlines SA |
| 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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