Correlation Between Townsquare Media and GLATFELTER

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

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

Diversification Opportunities for Townsquare Media and GLATFELTER

0.2

Correlation Coefficient

Townsquare Media  GLATFELTER

Modest diversification

The 3 months correlation between Townsquare and GLATFELTER is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Townsquare Media and GLATFELTER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLATFELTER 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 GLATFELTER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLATFELTER has no effect on the direction of Townsquare Media i.e., Townsquare Media and GLATFELTER go up and down completely randomly.

Pair Corralation between Townsquare Media and GLATFELTER

Assuming the 90 days horizon Townsquare Media is expected to generate 0.41 times more return on investment than GLATFELTER. However, Townsquare Media is 2.42 times less risky than GLATFELTER. It trades about 0.05 of its potential returns per unit of risk. GLATFELTER is currently generating about -0.01 per unit of risk. If you would invest  568.00  in Townsquare Media on October 24, 2024 and sell it today you would earn a total of  307.00  from holding Townsquare Media or generate 54.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	97.6%
Values	Daily Returns

Townsquare Media  vs.  GLATFELTER

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 nearly stable basic indicators, Townsquare Media is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

GLATFELTER

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GLATFELTER has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Townsquare Media and GLATFELTER

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

The idea behind Townsquare Media and GLATFELTER 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .