Correlation Between Hua Hong and TOWNSQUARE MEDIA
Can any of the company-specific risk be diversified away by investing in both Hua Hong 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 Hua Hong and TOWNSQUARE MEDIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hua Hong Semiconductor and TOWNSQUARE MEDIA INC, you can compare the effects of market volatilities on Hua Hong 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 Hua Hong with a short position of TOWNSQUARE MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hua Hong and TOWNSQUARE MEDIA.
Diversification Opportunities for Hua Hong and TOWNSQUARE MEDIA
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hua and TOWNSQUARE is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Hua Hong Semiconductor 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 Hua Hong 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 Hua Hong Semiconductor 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 Hua Hong i.e., Hua Hong and TOWNSQUARE MEDIA go up and down completely randomly.
Pair Corralation between Hua Hong and TOWNSQUARE MEDIA
Assuming the 90 days horizon Hua Hong is expected to generate 2.76 times less return on investment than TOWNSQUARE MEDIA. In addition to that, Hua Hong is 1.54 times more volatile than TOWNSQUARE MEDIA INC. It trades about 0.02 of its total potential returns per unit of risk. TOWNSQUARE MEDIA INC is currently generating about 0.07 per unit of volatility. If you would invest 935.00 in TOWNSQUARE MEDIA INC on October 9, 2024 and sell it today you would earn a total of 20.00 from holding TOWNSQUARE MEDIA INC or generate 2.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hua Hong Semiconductor vs. TOWNSQUARE MEDIA INC
Performance |
| Timeline |
| Hua Hong Semiconductor |
| TOWNSQUARE MEDIA INC |
Hua Hong and TOWNSQUARE MEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hua Hong and TOWNSQUARE MEDIA
The main advantage of trading using opposite Hua Hong and TOWNSQUARE MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hua Hong 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.| Hua Hong vs. Coor Service Management | Hua Hong vs. VULCAN MATERIALS | Hua Hong vs. Sims Metal Management | Hua Hong vs. SANOK RUBBER ZY |
| TOWNSQUARE MEDIA vs. Digilife Technologies Limited | TOWNSQUARE MEDIA vs. Easy Software AG | TOWNSQUARE MEDIA vs. AAC TECHNOLOGHLDGADR | TOWNSQUARE MEDIA vs. NetSol Technologies |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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