Correlation Between Deutsche Telekom and Grupo Televisa

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Can any of the company-specific risk be diversified away by investing in both Deutsche Telekom 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 Deutsche Telekom and Grupo Televisa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Telekom AG and Grupo Televisa SAB, you can compare the effects of market volatilities on Deutsche Telekom 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 Deutsche Telekom with a short position of Grupo Televisa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Telekom and Grupo Televisa.

Diversification Opportunities for Deutsche Telekom and Grupo Televisa

0.09
  Correlation Coefficient

Significant diversification

The 3 months correlation between Deutsche and Grupo is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Telekom AG 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 Deutsche Telekom 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 Deutsche Telekom AG 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 Deutsche Telekom i.e., Deutsche Telekom and Grupo Televisa go up and down completely randomly.

Pair Corralation between Deutsche Telekom and Grupo Televisa

Assuming the 90 days horizon Deutsche Telekom AG is expected to generate 0.35 times more return on investment than Grupo Televisa. However, Deutsche Telekom AG is 2.82 times less risky than Grupo Televisa. It trades about 0.05 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  1,826  in Deutsche Telekom AG on January 21, 2024 and sell it today you would earn a total of  578.00  from holding Deutsche Telekom AG or generate 31.65% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy92.84%
ValuesDaily Returns

Deutsche Telekom AG  vs.  Grupo Televisa SAB

 Performance 
       Timeline  
Deutsche Telekom 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Deutsche Telekom AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.
Grupo Televisa SAB 

Risk-Adjusted Performance

9 of 100

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

Deutsche Telekom and Grupo Televisa Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Deutsche Telekom and Grupo Televisa

The main advantage of trading using opposite Deutsche Telekom and Grupo Televisa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Telekom 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 Deutsche Telekom AG 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.
Check out your portfolio center.
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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