Correlation Between CITY OFFICE and TOWNSQUARE MEDIA
Can any of the company-specific risk be diversified away by investing in both CITY OFFICE 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 CITY OFFICE and TOWNSQUARE MEDIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CITY OFFICE REIT and TOWNSQUARE MEDIA INC, you can compare the effects of market volatilities on CITY OFFICE 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 CITY OFFICE with a short position of TOWNSQUARE MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CITY OFFICE and TOWNSQUARE MEDIA.
Diversification Opportunities for CITY OFFICE and TOWNSQUARE MEDIA
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CITY and TOWNSQUARE is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding CITY OFFICE REIT 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 CITY OFFICE 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 CITY OFFICE REIT 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 CITY OFFICE i.e., CITY OFFICE and TOWNSQUARE MEDIA go up and down completely randomly.
Pair Corralation between CITY OFFICE and TOWNSQUARE MEDIA
Assuming the 90 days horizon CITY OFFICE REIT is expected to generate 1.93 times more return on investment than TOWNSQUARE MEDIA. However, CITY OFFICE is 1.93 times more volatile than TOWNSQUARE MEDIA INC. It trades about 0.12 of its potential returns per unit of risk. TOWNSQUARE MEDIA INC is currently generating about -0.03 per unit of risk. If you would invest 468.00 in CITY OFFICE REIT on September 23, 2024 and sell it today you would earn a total of 37.00 from holding CITY OFFICE REIT or generate 7.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
CITY OFFICE REIT vs. TOWNSQUARE MEDIA INC
Performance |
Timeline |
CITY OFFICE REIT |
TOWNSQUARE MEDIA INC |
CITY OFFICE and TOWNSQUARE MEDIA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CITY OFFICE and TOWNSQUARE MEDIA
The main advantage of trading using opposite CITY OFFICE and TOWNSQUARE MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CITY OFFICE 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.CITY OFFICE vs. Zijin Mining Group | CITY OFFICE vs. DISTRICT METALS | CITY OFFICE vs. MICRONIC MYDATA | CITY OFFICE vs. GALENA MINING LTD |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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