Correlation Between WiMi Hologram and Townsquare Media

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

By analyzing existing cross correlation between WiMi Hologram Cloud and Townsquare Media, you can compare the effects of market volatilities on WiMi Hologram 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 WiMi Hologram with a short position of Townsquare Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of WiMi Hologram and Townsquare Media.

Diversification Opportunities for WiMi Hologram and Townsquare Media

-0.46

Correlation Coefficient

WiMi Hologram  Townsquare Media

Very good diversification

The 3 months correlation between WiMi and Townsquare is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding WiMi Hologram Cloud and Townsquare Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Townsquare Media and WiMi Hologram 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 WiMi Hologram Cloud 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 has no effect on the direction of WiMi Hologram i.e., WiMi Hologram and Townsquare Media go up and down completely randomly.

Pair Corralation between WiMi Hologram and Townsquare Media

Given the investment horizon of 90 days WiMi Hologram Cloud is expected to generate 3.15 times more return on investment than Townsquare Media. However, WiMi Hologram is 3.15 times more volatile than Townsquare Media. It trades about 0.05 of its potential returns per unit of risk. Townsquare Media is currently generating about 0.04 per unit of risk. If you would invest  156.00  in WiMi Hologram Cloud on September 29, 2024 and sell it today you would earn a total of  73.00  from holding WiMi Hologram Cloud or generate 46.79% return on investment over 90 days.

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

WiMi Hologram Cloud  vs.  Townsquare Media

WiMi Hologram Cloud

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WiMi Hologram Cloud are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady primary indicators, WiMi Hologram demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with WiMi Hologram and Townsquare Media

The main advantage of trading using opposite WiMi Hologram and Townsquare Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WiMi Hologram 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 WiMi Hologram Cloud and Townsquare Media 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.