Correlation Between TOWNSQUARE MEDIA and PT Global

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

By analyzing existing cross correlation between TOWNSQUARE MEDIA INC and PT Global Mediacom, you can compare the effects of market volatilities on TOWNSQUARE MEDIA and PT Global 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 TOWNSQUARE MEDIA with a short position of PT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOWNSQUARE MEDIA and PT Global.

Diversification Opportunities for TOWNSQUARE MEDIA and PT Global

-0.29

Correlation Coefficient

TOWNSQUARE MEDIA  PT Global

Very good diversification

The 3 months correlation between TOWNSQUARE and 06L is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding TOWNSQUARE MEDIA INC and PT Global Mediacom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Global Mediacom and TOWNSQUARE 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 TOWNSQUARE MEDIA INC are associated (or correlated) with PT Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Global Mediacom has no effect on the direction of TOWNSQUARE MEDIA i.e., TOWNSQUARE MEDIA and PT Global go up and down completely randomly.

Pair Corralation between TOWNSQUARE MEDIA and PT Global

Assuming the 90 days trading horizon TOWNSQUARE MEDIA INC is expected to generate 0.74 times more return on investment than PT Global. However, TOWNSQUARE MEDIA INC is 1.34 times less risky than PT Global. It trades about 0.09 of its potential returns per unit of risk. PT Global Mediacom is currently generating about -0.03 per unit of risk. If you would invest  857.00  in TOWNSQUARE MEDIA INC on September 15, 2024 and sell it today you would earn a total of  78.00  from holding TOWNSQUARE MEDIA INC or generate 9.1% return on investment over 90 days.

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

TOWNSQUARE MEDIA INC  vs.  PT Global Mediacom

TOWNSQUARE MEDIA INC

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TOWNSQUARE MEDIA INC are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, TOWNSQUARE MEDIA may actually be approaching a critical reversion point that can send shares even higher in January 2025.

PT Global Mediacom

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PT Global Mediacom has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, PT Global is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with TOWNSQUARE MEDIA and PT Global

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

The idea behind TOWNSQUARE MEDIA INC and PT Global Mediacom 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.