Correlation Between Grupo Televisa and SK Telecom

Can any of the company-specific risk be diversified away by investing in both Grupo Televisa and SK Telecom 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 SK Telecom 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 SK Telecom Co, you can compare the effects of market volatilities on Grupo Televisa and SK Telecom 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 SK Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Televisa and SK Telecom.

Diversification Opportunities for Grupo Televisa and SK Telecom

-0.24

Correlation Coefficient

Grupo Televisa  SK Telecom

Very good diversification

The 3 months correlation between Grupo and SKM is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Televisa SAB and SK Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Telecom 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 SK Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Telecom has no effect on the direction of Grupo Televisa i.e., Grupo Televisa and SK Telecom go up and down completely randomly.

Pair Corralation between Grupo Televisa and SK Telecom

Allowing for the 90-day total investment horizon Grupo Televisa SAB is expected to under-perform the SK Telecom. In addition to that, Grupo Televisa is 2.62 times more volatile than SK Telecom Co. It trades about -0.03 of its total potential returns per unit of risk. SK Telecom Co is currently generating about 0.05 per unit of volatility. If you would invest  1,901  in SK Telecom Co on August 31, 2024 and sell it today you would earn a total of  521.00  from holding SK Telecom Co or generate 27.41% return on investment over 90 days.

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

Grupo Televisa SAB  vs.  SK Telecom Co

Grupo Televisa SAB

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Televisa SAB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly sluggish basic indicators, Grupo Televisa may actually be approaching a critical reversion point that can send shares even higher in December 2024.

SK Telecom

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SK Telecom Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward-looking signals, SK Telecom is not utilizing all of its potentials. The new stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Grupo Televisa and SK Telecom

The main advantage of trading using opposite Grupo Televisa and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Televisa position performs unexpectedly, SK Telecom 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 SK Telecom will offset losses from the drop in SK Telecom's long position.

The idea behind Grupo Televisa SAB and SK Telecom Co 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.