Correlation Between Femasys and Townsquare Media

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

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

Diversification Opportunities for Femasys and Townsquare Media

0.26

Correlation Coefficient

Femasys  Townsquare Media

Modest diversification

The 3 months correlation between Femasys and Townsquare is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Femasys and Townsquare Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Townsquare Media and Femasys 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 Femasys 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 has no effect on the direction of Femasys i.e., Femasys and Townsquare Media go up and down completely randomly.

Pair Corralation between Femasys and Townsquare Media

Given the investment horizon of 90 days Femasys is expected to generate 0.77 times more return on investment than Townsquare Media. However, Femasys is 1.3 times less risky than Townsquare Media. It trades about 0.11 of its potential returns per unit of risk. Townsquare Media is currently generating about -0.04 per unit of risk. If you would invest  107.00  in Femasys on October 22, 2024 and sell it today you would earn a total of  4.00  from holding Femasys or generate 3.74% return on investment over 90 days.

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

Femasys  vs.  Townsquare Media

Femasys

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Femasys has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

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. Even with relatively invariable basic indicators, Townsquare Media is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Femasys and Townsquare Media

The main advantage of trading using opposite Femasys and Townsquare Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Femasys 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.

The idea behind Femasys and Townsquare Media 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.