Correlation Between Townsquare Media and TOWNSQUARE MEDIA

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

By analyzing existing cross correlation between Townsquare Media and TOWNSQUARE MEDIA INC, you can compare the effects of market volatilities on Townsquare Media and TOWNSQUARE MEDIA 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 TOWNSQUARE MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Townsquare Media and TOWNSQUARE MEDIA.

Diversification Opportunities for Townsquare Media and TOWNSQUARE MEDIA

0.94

Correlation Coefficient

Townsquare Media  TOWNSQUARE MEDIA

Almost no diversification

The 3 months correlation between Townsquare and TOWNSQUARE is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Townsquare Media and TOWNSQUARE MEDIA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOWNSQUARE MEDIA INC 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 are associated (or correlated) with TOWNSQUARE MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOWNSQUARE MEDIA INC has no effect on the direction of Townsquare Media i.e., Townsquare Media and TOWNSQUARE MEDIA go up and down completely randomly.

Pair Corralation between Townsquare Media and TOWNSQUARE MEDIA

Assuming the 90 days horizon Townsquare Media is expected to generate 1.01 times more return on investment than TOWNSQUARE MEDIA. However, Townsquare Media is 1.01 times more volatile than TOWNSQUARE MEDIA INC. It trades about 0.04 of its potential returns per unit of risk. TOWNSQUARE MEDIA INC is currently generating about 0.05 per unit of risk. If you would invest  568.00  in Townsquare Media on October 25, 2024 and sell it today you would earn a total of  292.00  from holding Townsquare Media or generate 51.41% return on investment over 90 days.

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

Townsquare Media  vs.  TOWNSQUARE MEDIA INC

Townsquare Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Townsquare Media has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

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 latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Townsquare Media and TOWNSQUARE MEDIA

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

The idea behind Townsquare Media and TOWNSQUARE MEDIA INC 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.

Check out your portfolio center.

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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.