Correlation Between Townsquare Media and KENEDIX OFFICE

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

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

Diversification Opportunities for Townsquare Media and KENEDIX OFFICE

0.05

Correlation Coefficient

Townsquare Media  KENEDIX OFFICE

Significant diversification

The 3 months correlation between Townsquare and KENEDIX is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Townsquare Media and KENEDIX OFFICE INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KENEDIX OFFICE INV 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 KENEDIX OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KENEDIX OFFICE INV has no effect on the direction of Townsquare Media i.e., Townsquare Media and KENEDIX OFFICE go up and down completely randomly.

Pair Corralation between Townsquare Media and KENEDIX OFFICE

Assuming the 90 days horizon Townsquare Media is expected to under-perform the KENEDIX OFFICE. In addition to that, Townsquare Media is 1.85 times more volatile than KENEDIX OFFICE INV. It trades about -0.04 of its total potential returns per unit of risk. KENEDIX OFFICE INV is currently generating about 0.0 per unit of volatility. If you would invest  93,000  in KENEDIX OFFICE INV on October 9, 2024 and sell it today you would lose (2,500) from holding KENEDIX OFFICE INV or give up 2.69% of portfolio value over 90 days.

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

Townsquare Media  vs.  KENEDIX OFFICE INV

Townsquare Media

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Townsquare Media are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. 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.

KENEDIX OFFICE INV

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in KENEDIX OFFICE INV are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, KENEDIX OFFICE is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Townsquare Media and KENEDIX OFFICE

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

The idea behind Townsquare Media and KENEDIX OFFICE INV 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.