Correlation Between Network Media and Alsea SAB

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

By analyzing existing cross correlation between Network Media Group and Alsea SAB de, you can compare the effects of market volatilities on Network Media and Alsea SAB 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 Network Media with a short position of Alsea SAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Network Media and Alsea SAB.

Diversification Opportunities for Network Media and Alsea SAB

0.53

Correlation Coefficient

Network Media  Alsea SAB

Very weak diversification

The 3 months correlation between Network and Alsea is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Network Media Group and Alsea SAB de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alsea SAB de and Network Media 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 Network Media Group are associated (or correlated) with Alsea SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alsea SAB de has no effect on the direction of Network Media i.e., Network Media and Alsea SAB go up and down completely randomly.

Pair Corralation between Network Media and Alsea SAB

Assuming the 90 days horizon Network Media Group is expected to under-perform the Alsea SAB. In addition to that, Network Media is 1.16 times more volatile than Alsea SAB de. It trades about -0.01 of its total potential returns per unit of risk. Alsea SAB de is currently generating about 0.12 per unit of volatility. If you would invest  230.00  in Alsea SAB de on May 27, 2025 and sell it today you would earn a total of  59.00  from holding Alsea SAB de or generate 25.65% return on investment over 90 days.

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

Network Media Group  vs.  Alsea SAB de

Network Media Group

Risk-Adjusted Performance

Weakest

Over the last 90 days Network Media Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Network Media is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Alsea SAB de

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Alsea SAB de are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Alsea SAB reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Network Media and Alsea SAB

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

The idea behind Network Media Group and Alsea SAB de 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.