Correlation Between Townsquare Media and Mosaic

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

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

Diversification Opportunities for Townsquare Media and Mosaic

0.28

Correlation Coefficient

Townsquare Media  Mosaic

Modest diversification

The 3 months correlation between Townsquare and Mosaic is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Townsquare Media and The Mosaic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mosaic 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 Mosaic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mosaic has no effect on the direction of Townsquare Media i.e., Townsquare Media and Mosaic go up and down completely randomly.

Pair Corralation between Townsquare Media and Mosaic

Considering the 90-day investment horizon Townsquare Media is expected to under-perform the Mosaic. In addition to that, Townsquare Media is 1.23 times more volatile than The Mosaic. It trades about -0.06 of its total potential returns per unit of risk. The Mosaic is currently generating about 0.39 per unit of volatility. If you would invest  2,408  in The Mosaic on October 26, 2024 and sell it today you would earn a total of  413.00  from holding The Mosaic or generate 17.15% return on investment over 90 days.

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

Townsquare Media  vs.  The Mosaic

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.

Mosaic

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Mosaic are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Mosaic may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Townsquare Media and Mosaic

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

The idea behind Townsquare Media and The Mosaic 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.