Correlation Between TOWNSQUARE MEDIA and Singapore ReinsuranceLimit

Can any of the company-specific risk be diversified away by investing in both TOWNSQUARE MEDIA and Singapore ReinsuranceLimit 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 Singapore ReinsuranceLimit 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 Singapore Reinsurance, you can compare the effects of market volatilities on TOWNSQUARE MEDIA and Singapore ReinsuranceLimit 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 Singapore ReinsuranceLimit. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOWNSQUARE MEDIA and Singapore ReinsuranceLimit.

Diversification Opportunities for TOWNSQUARE MEDIA and Singapore ReinsuranceLimit

-0.41

Correlation Coefficient

TOWNSQUARE MEDIA  Singapore ReinsuranceLimit

Very good diversification

The 3 months correlation between TOWNSQUARE and Singapore is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding TOWNSQUARE MEDIA INC and Singapore Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore ReinsuranceLimit 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 Singapore ReinsuranceLimit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore ReinsuranceLimit has no effect on the direction of TOWNSQUARE MEDIA i.e., TOWNSQUARE MEDIA and Singapore ReinsuranceLimit go up and down completely randomly.

Pair Corralation between TOWNSQUARE MEDIA and Singapore ReinsuranceLimit

Assuming the 90 days trading horizon TOWNSQUARE MEDIA INC is expected to under-perform the Singapore ReinsuranceLimit. But the stock apears to be less risky and, when comparing its historical volatility, TOWNSQUARE MEDIA INC is 1.05 times less risky than Singapore ReinsuranceLimit. The stock trades about 0.0 of its potential returns per unit of risk. The Singapore Reinsurance is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  3,100  in Singapore Reinsurance on October 24, 2024 and sell it today you would earn a total of  580.00  from holding Singapore Reinsurance or generate 18.71% return on investment over 90 days.

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

TOWNSQUARE MEDIA INC  vs.  Singapore Reinsurance

TOWNSQUARE MEDIA INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TOWNSQUARE MEDIA INC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, TOWNSQUARE MEDIA is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Singapore ReinsuranceLimit

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Singapore Reinsurance are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Singapore ReinsuranceLimit unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TOWNSQUARE MEDIA and Singapore ReinsuranceLimit

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

The idea behind TOWNSQUARE MEDIA INC and Singapore Reinsurance 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.