Correlation Between Weibo Corp and Grupo Televisa

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

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

Diversification Opportunities for Weibo Corp and Grupo Televisa

0.38

Correlation Coefficient

Weibo Corp  Grupo Televisa

Weak diversification

The 3 months correlation between Weibo and Grupo is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Weibo Corp 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 Weibo Corp 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 Weibo Corp 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 Weibo Corp i.e., Weibo Corp and Grupo Televisa go up and down completely randomly.

Pair Corralation between Weibo Corp and Grupo Televisa

Allowing for the 90-day total investment horizon Weibo Corp is expected to generate 1.12 times more return on investment than Grupo Televisa. However, Weibo Corp is 1.12 times more volatile than Grupo Televisa SAB. It trades about 0.16 of its potential returns per unit of risk. Grupo Televisa SAB is currently generating about 0.02 per unit of risk. If you would invest  723.00  in Weibo Corp on September 15, 2024 and sell it today you would earn a total of  313.00  from holding Weibo Corp or generate 43.29% return on investment over 90 days.

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

Weibo Corp  vs.  Grupo Televisa SAB

Weibo Corp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Weibo Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating fundamental drivers, Weibo Corp sustained solid returns over the last few months and may actually be approaching a breakup point.

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 Weibo Corp and Grupo Televisa

The main advantage of trading using opposite Weibo Corp and Grupo Televisa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weibo Corp 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 Weibo Corp 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.