Correlation Between BCB Bancorp and Grupo Televisa

Can any of the company-specific risk be diversified away by investing in both BCB Bancorp 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 BCB Bancorp and Grupo Televisa into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BCB Bancorp and Grupo Televisa SAB, you can compare the effects of market volatilities on BCB Bancorp 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 BCB Bancorp with a short position of Grupo Televisa. Check out your portfolio center. Please also check ongoing floating volatility patterns of BCB Bancorp and Grupo Televisa.

Diversification Opportunities for BCB Bancorp and Grupo Televisa

-0.53

Correlation Coefficient

BCB Bancorp  Grupo Televisa

Excellent diversification

The 3 months correlation between BCB and Grupo is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding BCB Bancorp 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 BCB Bancorp 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 BCB Bancorp 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 BCB Bancorp i.e., BCB Bancorp and Grupo Televisa go up and down completely randomly.

Pair Corralation between BCB Bancorp and Grupo Televisa

Given the investment horizon of 90 days BCB Bancorp is expected to generate 0.79 times more return on investment than Grupo Televisa. However, BCB Bancorp is 1.26 times less risky than Grupo Televisa. It trades about 0.03 of its potential returns per unit of risk. Grupo Televisa SAB is currently generating about 0.0 per unit of risk. If you would invest  1,095  in BCB Bancorp on September 14, 2024 and sell it today you would earn a total of  134.00  from holding BCB Bancorp or generate 12.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

BCB Bancorp  vs.  Grupo Televisa SAB

BCB Bancorp

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days BCB Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable fundamental drivers, BCB Bancorp is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Grupo Televisa SAB

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Televisa SAB are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Grupo Televisa is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with BCB Bancorp and Grupo Televisa

The main advantage of trading using opposite BCB Bancorp and Grupo Televisa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BCB Bancorp 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 BCB Bancorp 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.

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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.