Correlation Between Grupo Televisa and Xerox

Can any of the company-specific risk be diversified away by investing in both Grupo Televisa and Xerox 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 Xerox 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 Xerox 675 percent, you can compare the effects of market volatilities on Grupo Televisa and Xerox 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 Xerox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Televisa and Xerox.

Diversification Opportunities for Grupo Televisa and Xerox

0.07

Correlation Coefficient

Grupo Televisa  Xerox

Significant diversification

The 3 months correlation between Grupo and Xerox is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Televisa SAB and Xerox 675 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xerox 675 percent 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 Xerox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xerox 675 percent has no effect on the direction of Grupo Televisa i.e., Grupo Televisa and Xerox go up and down completely randomly.

Pair Corralation between Grupo Televisa and Xerox

Allowing for the 90-day total investment horizon Grupo Televisa SAB is expected to generate 1.14 times more return on investment than Xerox. However, Grupo Televisa is 1.14 times more volatile than Xerox 675 percent. It trades about 0.04 of its potential returns per unit of risk. Xerox 675 percent is currently generating about 0.01 per unit of risk. If you would invest  186.00  in Grupo Televisa SAB on September 13, 2024 and sell it today you would earn a total of  10.50  from holding Grupo Televisa SAB or generate 5.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

Grupo Televisa SAB  vs.  Xerox 675 percent

Grupo Televisa SAB

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Televisa SAB are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Grupo Televisa may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Xerox 675 percent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Xerox 675 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Xerox is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Grupo Televisa and Xerox

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

The idea behind Grupo Televisa SAB and Xerox 675 percent 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.

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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.