Correlation Between Virtus Investment and TOWNSQUARE MEDIA

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

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

Diversification Opportunities for Virtus Investment and TOWNSQUARE MEDIA

0.19

Correlation Coefficient

Virtus Investment  TOWNSQUARE MEDIA

Average diversification

The 3 months correlation between Virtus and TOWNSQUARE is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Virtus Investment Partners 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 Virtus Investment 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 Virtus Investment Partners 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 Virtus Investment i.e., Virtus Investment and TOWNSQUARE MEDIA go up and down completely randomly.

Pair Corralation between Virtus Investment and TOWNSQUARE MEDIA

Assuming the 90 days horizon Virtus Investment Partners is expected to under-perform the TOWNSQUARE MEDIA. But the stock apears to be less risky and, when comparing its historical volatility, Virtus Investment Partners is 1.35 times less risky than TOWNSQUARE MEDIA. The stock trades about -0.4 of its potential returns per unit of risk. The TOWNSQUARE MEDIA INC is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest  940.00  in TOWNSQUARE MEDIA INC on October 17, 2024 and sell it today you would lose (65.00) from holding TOWNSQUARE MEDIA INC or give up 6.91% of portfolio value over 90 days.

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

Virtus Investment Partners  vs.  TOWNSQUARE MEDIA INC

Virtus Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virtus Investment Partners has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Virtus Investment is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

TOWNSQUARE MEDIA INC

Risk-Adjusted Performance

0 of 100

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 Virtus Investment and TOWNSQUARE MEDIA

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