Correlation Between Townsquare Media and Boston Omaha

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

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

Diversification Opportunities for Townsquare Media and Boston Omaha

0.67

Correlation Coefficient

Townsquare Media  Boston Omaha

Poor diversification

The 3 months correlation between Townsquare and Boston is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Townsquare Media and Boston Omaha Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boston Omaha Corp 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 Boston Omaha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boston Omaha Corp has no effect on the direction of Townsquare Media i.e., Townsquare Media and Boston Omaha go up and down completely randomly.

Pair Corralation between Townsquare Media and Boston Omaha

Considering the 90-day investment horizon Townsquare Media is expected to generate 1.35 times more return on investment than Boston Omaha. However, Townsquare Media is 1.35 times more volatile than Boston Omaha Corp. It trades about 0.04 of its potential returns per unit of risk. Boston Omaha Corp is currently generating about -0.05 per unit of risk. If you would invest  658.00  in Townsquare Media on October 22, 2024 and sell it today you would earn a total of  281.00  from holding Townsquare Media or generate 42.71% return on investment over 90 days.

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

Townsquare Media  vs.  Boston Omaha Corp

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.

Boston Omaha Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boston Omaha Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Boston Omaha is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Townsquare Media and Boston Omaha

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

The idea behind Townsquare Media and Boston Omaha Corp 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 Transaction History module to view history of all your transactions and understand their impact on performance.