Correlation Between Townsquare Media and No Borders

Can any of the company-specific risk be diversified away by investing in both Townsquare Media and No Borders 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 No Borders into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Townsquare Media and No Borders, you can compare the effects of market volatilities on Townsquare Media and No Borders 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 No Borders. Check out your portfolio center. Please also check ongoing floating volatility patterns of Townsquare Media and No Borders.

Diversification Opportunities for Townsquare Media and No Borders

-0.57

Correlation Coefficient

Townsquare Media  No Borders

Excellent diversification

The 3 months correlation between Townsquare and NBDR is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Townsquare Media and No Borders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on No Borders 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 No Borders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of No Borders has no effect on the direction of Townsquare Media i.e., Townsquare Media and No Borders go up and down completely randomly.

Pair Corralation between Townsquare Media and No Borders

Considering the 90-day investment horizon Townsquare Media is expected to under-perform the No Borders. But the stock apears to be less risky and, when comparing its historical volatility, Townsquare Media is 63.52 times less risky than No Borders. The stock trades about -0.05 of its potential returns per unit of risk. The No Borders is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  0.00  in No Borders on October 10, 2024 and sell it today you would earn a total of  0.01  from holding No Borders or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Townsquare Media  vs.  No Borders

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 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.

No Borders

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in No Borders are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating fundamental indicators, No Borders reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Townsquare Media and No Borders

The main advantage of trading using opposite Townsquare Media and No Borders positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Townsquare Media position performs unexpectedly, No Borders 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 No Borders will offset losses from the drop in No Borders' long position.

The idea behind Townsquare Media and No Borders 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.

Check out your portfolio center.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.