Correlation Between Grupo Televisa and Pinterest

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

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

Diversification Opportunities for Grupo Televisa and Pinterest

0.04

Correlation Coefficient

Grupo Televisa  Pinterest

Significant diversification

The 3 months correlation between Grupo and Pinterest is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Televisa SAB and Pinterest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinterest and Grupo Televisa 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 Grupo Televisa SAB are associated (or correlated) with Pinterest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinterest has no effect on the direction of Grupo Televisa i.e., Grupo Televisa and Pinterest go up and down completely randomly.

Pair Corralation between Grupo Televisa and Pinterest

Allowing for the 90-day total investment horizon Grupo Televisa SAB is expected to under-perform the Pinterest. But the stock apears to be less risky and, when comparing its historical volatility, Grupo Televisa SAB is 1.47 times less risky than Pinterest. The stock trades about -0.06 of its potential returns per unit of risk. The Pinterest is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  3,513  in Pinterest on February 2, 2024 and sell it today you would earn a total of  537.00  from holding Pinterest or generate 15.29% return on investment over 90 days.

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

Grupo Televisa SAB  vs.  Pinterest

Grupo Televisa SAB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grupo Televisa SAB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Grupo Televisa is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pinterest

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pinterest are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Pinterest is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Grupo Televisa and Pinterest

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

The idea behind Grupo Televisa SAB and Pinterest 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.