Correlation Between Kidoz and Townsquare Media

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

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

Diversification Opportunities for Kidoz and Townsquare Media

0.29

Correlation Coefficient

Kidoz  Townsquare Media

Modest diversification

The 3 months correlation between Kidoz and Townsquare is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Kidoz Inc and Townsquare Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Townsquare Media and Kidoz 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 Kidoz Inc 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 Kidoz i.e., Kidoz and Townsquare Media go up and down completely randomly.

Pair Corralation between Kidoz and Townsquare Media

Assuming the 90 days horizon Kidoz Inc is expected to generate 17.23 times more return on investment than Townsquare Media. However, Kidoz is 17.23 times more volatile than Townsquare Media. It trades about 0.08 of its potential returns per unit of risk. Townsquare Media is currently generating about -0.06 per unit of risk. If you would invest  11.00  in Kidoz Inc on November 19, 2024 and sell it today you would lose (8.00) from holding Kidoz Inc or give up 72.73% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Kidoz Inc  vs.  Townsquare Media

Kidoz Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kidoz Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Kidoz reported solid returns over the last few months and may actually be approaching a breakup point.

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. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Kidoz and Townsquare Media

The main advantage of trading using opposite Kidoz and Townsquare Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kidoz 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 Kidoz Inc 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..