Correlation Between KDDI Corp and Grupo Televisa

Can any of the company-specific risk be diversified away by investing in both KDDI 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 KDDI 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 KDDI Corp and Grupo Televisa SAB, you can compare the effects of market volatilities on KDDI 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 KDDI Corp with a short position of Grupo Televisa. Check out your portfolio center. Please also check ongoing floating volatility patterns of KDDI Corp and Grupo Televisa.

Diversification Opportunities for KDDI Corp and Grupo Televisa

-0.72

Correlation Coefficient

KDDI Corp  Grupo Televisa

Pay attention - limited upside

The 3 months correlation between KDDI and Grupo is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding KDDI 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 KDDI 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 KDDI 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 KDDI Corp i.e., KDDI Corp and Grupo Televisa go up and down completely randomly.

Pair Corralation between KDDI Corp and Grupo Televisa

Assuming the 90 days horizon KDDI Corp is expected to generate 0.61 times more return on investment than Grupo Televisa. However, KDDI Corp is 1.63 times less risky than Grupo Televisa. It trades about -0.02 of its potential returns per unit of risk. Grupo Televisa SAB is currently generating about -0.04 per unit of risk. If you would invest  3,228  in KDDI Corp on March 8, 2024 and sell it today you would lose (563.00) from holding KDDI Corp or give up 17.44% of portfolio value over 90 days.

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

KDDI Corp  vs.  Grupo Televisa SAB

KDDI Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KDDI Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Grupo Televisa SAB

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Televisa SAB are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent technical and fundamental indicators, Grupo Televisa may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Pair Trading with KDDI Corp and Grupo Televisa

The main advantage of trading using opposite KDDI Corp and Grupo Televisa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KDDI 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 KDDI 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.