Correlation Between Townsquare Media and SIEMENS AG

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

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

Diversification Opportunities for Townsquare Media and SIEMENS AG

-0.61

Correlation Coefficient

Townsquare Media  SIEMENS AG

Excellent diversification

The 3 months correlation between Townsquare and SIEMENS is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Townsquare Media and SIEMENS AG SP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIEMENS AG SP 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 SIEMENS AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIEMENS AG SP has no effect on the direction of Townsquare Media i.e., Townsquare Media and SIEMENS AG go up and down completely randomly.

Pair Corralation between Townsquare Media and SIEMENS AG

Assuming the 90 days horizon Townsquare Media is expected to under-perform the SIEMENS AG. But the stock apears to be less risky and, when comparing its historical volatility, Townsquare Media is 1.08 times less risky than SIEMENS AG. The stock trades about -0.14 of its potential returns per unit of risk. The SIEMENS AG SP is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  9,134  in SIEMENS AG SP on December 23, 2024 and sell it today you would earn a total of  2,166  from holding SIEMENS AG SP or generate 23.71% return on investment over 90 days.

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

Townsquare Media  vs.  SIEMENS AG SP

Townsquare Media

Risk-Adjusted Performance

Very Weak

Over the last 90 days Townsquare Media has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

SIEMENS AG SP

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SIEMENS AG SP are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, SIEMENS AG reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Townsquare Media and SIEMENS AG

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

The idea behind Townsquare Media and SIEMENS AG SP 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.