Correlation Between Grupo Media and WT OFFSHORE

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

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

Diversification Opportunities for Grupo Media and WT OFFSHORE

0.77

Correlation Coefficient

Grupo Media  WT OFFSHORE

Poor diversification

The 3 months correlation between Grupo and UWV is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Media Capital and WT OFFSHORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WT OFFSHORE and Grupo 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 Grupo Media Capital are associated (or correlated) with WT OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WT OFFSHORE has no effect on the direction of Grupo Media i.e., Grupo Media and WT OFFSHORE go up and down completely randomly.

Pair Corralation between Grupo Media and WT OFFSHORE

Assuming the 90 days trading horizon Grupo Media is expected to generate 11.9 times less return on investment than WT OFFSHORE. But when comparing it to its historical volatility, Grupo Media Capital is 9.33 times less risky than WT OFFSHORE. It trades about 0.13 of its potential returns per unit of risk. WT OFFSHORE is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  99.00  in WT OFFSHORE on April 25, 2025 and sell it today you would earn a total of  48.00  from holding WT OFFSHORE or generate 48.48% return on investment over 90 days.

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

Grupo Media Capital  vs.  WT OFFSHORE

Grupo Media Capital

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Grupo Media Capital are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Grupo Media is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

WT OFFSHORE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WT OFFSHORE are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, WT OFFSHORE unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grupo Media and WT OFFSHORE

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

The idea behind Grupo Media Capital and WT OFFSHORE 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..