Correlation Between TOWNSQUARE MEDIA and PT Global
Can any of the company-specific risk be diversified away by investing in both TOWNSQUARE MEDIA and PT Global 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 PT Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOWNSQUARE MEDIA INC and PT Global Mediacom, you can compare the effects of market volatilities on TOWNSQUARE MEDIA and PT Global 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 PT Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOWNSQUARE MEDIA and PT Global.
Diversification Opportunities for TOWNSQUARE MEDIA and PT Global
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between TOWNSQUARE and 06L is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding TOWNSQUARE MEDIA INC and PT Global Mediacom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Global Mediacom 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 INC are associated (or correlated) with PT Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Global Mediacom has no effect on the direction of TOWNSQUARE MEDIA i.e., TOWNSQUARE MEDIA and PT Global go up and down completely randomly.
Pair Corralation between TOWNSQUARE MEDIA and PT Global
Assuming the 90 days trading horizon TOWNSQUARE MEDIA is expected to generate 1.93 times less return on investment than PT Global. But when comparing it to its historical volatility, TOWNSQUARE MEDIA INC is 4.04 times less risky than PT Global. It trades about 0.05 of its potential returns per unit of risk. PT Global Mediacom is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1.30 in PT Global Mediacom on August 24, 2024 and sell it today you would lose (0.55) from holding PT Global Mediacom or give up 42.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TOWNSQUARE MEDIA INC vs. PT Global Mediacom
Performance |
| Timeline |
| TOWNSQUARE MEDIA INC |
| PT Global Mediacom |
TOWNSQUARE MEDIA and PT Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOWNSQUARE MEDIA and PT Global
The main advantage of trading using opposite TOWNSQUARE MEDIA and PT Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOWNSQUARE MEDIA position performs unexpectedly, PT Global 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 PT Global will offset losses from the drop in PT Global's long position.| TOWNSQUARE MEDIA vs. Apple Inc | TOWNSQUARE MEDIA vs. Apple Inc | TOWNSQUARE MEDIA vs. Apple Inc | TOWNSQUARE MEDIA vs. Apple Inc |
| PT Global vs. Sumitomo Mitsui Construction | PT Global vs. Australian Agricultural | PT Global vs. TITAN MACHINERY | PT Global vs. AOI Electronics Co |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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