Correlation Between JAPAN POST and Grupo Televisa

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

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

Diversification Opportunities for JAPAN POST and Grupo Televisa

0.32

Correlation Coefficient

JAPAN POST  Grupo Televisa

Weak diversification

The 3 months correlation between JAPAN and Grupo is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding JAPAN POST BANK 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 JAPAN POST 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 JAPAN POST BANK 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 JAPAN POST i.e., JAPAN POST and Grupo Televisa go up and down completely randomly.

Pair Corralation between JAPAN POST and Grupo Televisa

If you would invest  57.00  in Grupo Televisa SAB on January 25, 2024 and sell it today you would earn a total of  8.00  from holding Grupo Televisa SAB or generate 14.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

JAPAN POST BANK  vs.  Grupo Televisa SAB

JAPAN POST BANK

Risk-Adjusted Performance

0 of 100

Very Weak

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

Grupo Televisa SAB

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Televisa SAB are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Grupo Televisa reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with JAPAN POST and Grupo Televisa

The main advantage of trading using opposite JAPAN POST and Grupo Televisa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JAPAN POST 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 JAPAN POST BANK 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.