Correlation Between Grupo Televisa and RTL Group

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

Diversification Opportunities for Grupo Televisa and RTL Group

-0.14
  Correlation Coefficient

Good diversification

The 3 months correlation between Grupo and RTL is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Televisa SAB and RTL Group SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RTL Group SA 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 RTL Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RTL Group SA has no effect on the direction of Grupo Televisa i.e., Grupo Televisa and RTL Group go up and down completely randomly.

Pair Corralation between Grupo Televisa and RTL Group

Assuming the 90 days horizon Grupo Televisa SAB is expected to under-perform the RTL Group. But the pink sheet apears to be less risky and, when comparing its historical volatility, Grupo Televisa SAB is 1.04 times less risky than RTL Group. The pink sheet trades about -0.06 of its potential returns per unit of risk. The RTL Group SA is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  425.00  in RTL Group SA on December 29, 2023 and sell it today you would lose (80.00) from holding RTL Group SA or give up 18.82% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Grupo Televisa SAB  vs.  RTL Group SA

 Performance 
       Timeline  
Grupo Televisa SAB 

Risk-Adjusted Performance

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Low
 
High
Very Weak
Over the last 90 days Grupo Televisa SAB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
RTL Group SA 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days RTL Group SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, RTL Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Grupo Televisa and RTL Group Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Grupo Televisa and RTL Group

The main advantage of trading using opposite Grupo Televisa and RTL Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Televisa position performs unexpectedly, RTL Group 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 RTL Group will offset losses from the drop in RTL Group's long position.
The idea behind Grupo Televisa SAB and RTL Group SA 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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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