Correlation Between Grupo Televisa and VS Media

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

Diversification Opportunities for Grupo Televisa and VS Media

0.19

Correlation Coefficient

Grupo Televisa  VS Media

Average diversification

The 3 months correlation between Grupo and VSME is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Televisa SAB and VS Media Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VS Media Holdings 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 VS Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VS Media Holdings has no effect on the direction of Grupo Televisa i.e., Grupo Televisa and VS Media go up and down completely randomly.

Pair Corralation between Grupo Televisa and VS Media

Allowing for the 90-day total investment horizon Grupo Televisa is expected to generate 40.86 times less return on investment than VS Media. But when comparing it to its historical volatility, Grupo Televisa SAB is 4.84 times less risky than VS Media. It trades about 0.01 of its potential returns per unit of risk. VS Media Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  95.00  in VS Media Holdings on August 30, 2024 and sell it today you would earn a total of  24.00  from holding VS Media Holdings or generate 25.26% return on investment over 90 days.

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

Grupo Televisa SAB  vs.  VS Media Holdings

Grupo Televisa SAB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grupo Televisa SAB has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

VS Media Holdings

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in VS Media Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile primary indicators, VS Media exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grupo Televisa and VS Media

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

The idea behind Grupo Televisa SAB and VS Media Holdings 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.