Correlation Between Townsquare Media and KBC ANCORA

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

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

Diversification Opportunities for Townsquare Media and KBC ANCORA

-0.27

Correlation Coefficient

Townsquare Media  KBC ANCORA

Very good diversification

The 3 months correlation between Townsquare and KBC is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Townsquare Media and KBC ANCORA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBC ANCORA 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 KBC ANCORA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBC ANCORA has no effect on the direction of Townsquare Media i.e., Townsquare Media and KBC ANCORA go up and down completely randomly.

Pair Corralation between Townsquare Media and KBC ANCORA

Assuming the 90 days horizon Townsquare Media is expected to generate 9.48 times less return on investment than KBC ANCORA. In addition to that, Townsquare Media is 2.1 times more volatile than KBC ANCORA. It trades about 0.01 of its total potential returns per unit of risk. KBC ANCORA is currently generating about 0.16 per unit of volatility. If you would invest  4,630  in KBC ANCORA on October 10, 2024 and sell it today you would earn a total of  520.00  from holding KBC ANCORA or generate 11.23% return on investment over 90 days.

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

Townsquare Media  vs.  KBC ANCORA

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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

KBC ANCORA

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in KBC ANCORA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, KBC ANCORA may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Townsquare Media and KBC ANCORA

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

The idea behind Townsquare Media and KBC ANCORA 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.