Correlation Between Oracle and TOWNSQUARE MEDIA

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

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

Diversification Opportunities for Oracle and TOWNSQUARE MEDIA

0.71

Correlation Coefficient

Oracle  TOWNSQUARE MEDIA

Poor diversification

The 3 months correlation between Oracle and TOWNSQUARE is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Oracle 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 Oracle 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 Oracle 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 Oracle i.e., Oracle and TOWNSQUARE MEDIA go up and down completely randomly.

Pair Corralation between Oracle and TOWNSQUARE MEDIA

Given the investment horizon of 90 days Oracle is expected to under-perform the TOWNSQUARE MEDIA. In addition to that, Oracle is 1.39 times more volatile than TOWNSQUARE MEDIA INC. It trades about -0.07 of its total potential returns per unit of risk. TOWNSQUARE MEDIA INC is currently generating about -0.07 per unit of volatility. If you would invest  860.00  in TOWNSQUARE MEDIA INC on December 30, 2024 and sell it today you would lose (95.00) from holding TOWNSQUARE MEDIA INC or give up 11.05% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.88%
Values	Daily Returns

Oracle  vs.  TOWNSQUARE MEDIA INC

Oracle

Risk-Adjusted Performance

Very Weak

Over the last 90 days Oracle has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

TOWNSQUARE MEDIA INC

Risk-Adjusted Performance

Very Weak

Over the last 90 days TOWNSQUARE MEDIA INC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Oracle and TOWNSQUARE MEDIA

The main advantage of trading using opposite Oracle and TOWNSQUARE MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oracle 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 Oracle and TOWNSQUARE MEDIA INC 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.