Correlation Between Ihuman and Grupo Televisa

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

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

Diversification Opportunities for Ihuman and Grupo Televisa

0.82

Correlation Coefficient

Ihuman  Grupo Televisa

Very poor diversification

The 3 months correlation between Ihuman and Grupo is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Ihuman Inc 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 Ihuman 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 Ihuman Inc 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 Ihuman i.e., Ihuman and Grupo Televisa go up and down completely randomly.

Pair Corralation between Ihuman and Grupo Televisa

Allowing for the 90-day total investment horizon Ihuman Inc is expected to generate 1.25 times more return on investment than Grupo Televisa. However, Ihuman is 1.25 times more volatile than Grupo Televisa SAB. It trades about 0.08 of its potential returns per unit of risk. Grupo Televisa SAB is currently generating about 0.03 per unit of risk. If you would invest  160.00  in Ihuman Inc on July 24, 2024 and sell it today you would earn a total of  27.00  from holding Ihuman Inc or generate 16.88% return on investment over 90 days.

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

Ihuman Inc  vs.  Grupo Televisa SAB

Ihuman Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ihuman Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain technical indicators, Ihuman demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Grupo Televisa SAB

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Televisa SAB are ranked lower than 2 (%) 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 November 2024.

Pair Trading with Ihuman and Grupo Televisa

The main advantage of trading using opposite Ihuman and Grupo Televisa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ihuman 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 Ihuman Inc 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.