Correlation Between TOWNSQUARE MEDIA and TROPHY GAMES
Can any of the company-specific risk be diversified away by investing in both TOWNSQUARE MEDIA and TROPHY GAMES 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 TROPHY GAMES 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 TROPHY GAMES DEV, you can compare the effects of market volatilities on TOWNSQUARE MEDIA and TROPHY GAMES 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 TROPHY GAMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOWNSQUARE MEDIA and TROPHY GAMES.
Diversification Opportunities for TOWNSQUARE MEDIA and TROPHY GAMES
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TOWNSQUARE and TROPHY is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding TOWNSQUARE MEDIA INC and TROPHY GAMES DEV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TROPHY GAMES DEV 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 TROPHY GAMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TROPHY GAMES DEV has no effect on the direction of TOWNSQUARE MEDIA i.e., TOWNSQUARE MEDIA and TROPHY GAMES go up and down completely randomly.
Pair Corralation between TOWNSQUARE MEDIA and TROPHY GAMES
Assuming the 90 days trading horizon TOWNSQUARE MEDIA INC is expected to generate 0.71 times more return on investment than TROPHY GAMES. However, TOWNSQUARE MEDIA INC is 1.42 times less risky than TROPHY GAMES. It trades about 0.08 of its potential returns per unit of risk. TROPHY GAMES DEV is currently generating about -0.08 per unit of risk. If you would invest 847.00 in TOWNSQUARE MEDIA INC on September 12, 2024 and sell it today you would earn a total of 73.00 from holding TOWNSQUARE MEDIA INC or generate 8.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
TOWNSQUARE MEDIA INC vs. TROPHY GAMES DEV
Performance |
| Timeline |
| TOWNSQUARE MEDIA INC |
| TROPHY GAMES DEV |
TOWNSQUARE MEDIA and TROPHY GAMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOWNSQUARE MEDIA and TROPHY GAMES
The main advantage of trading using opposite TOWNSQUARE MEDIA and TROPHY GAMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOWNSQUARE MEDIA position performs unexpectedly, TROPHY GAMES 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 TROPHY GAMES will offset losses from the drop in TROPHY GAMES's long position.| TOWNSQUARE MEDIA vs. Apple Inc | TOWNSQUARE MEDIA vs. Apple Inc | TOWNSQUARE MEDIA vs. Apple Inc | TOWNSQUARE MEDIA vs. Apple Inc |
| TROPHY GAMES vs. NEXON Co | TROPHY GAMES vs. Take Two Interactive Software | TROPHY GAMES vs. Superior Plus Corp | TROPHY GAMES vs. SIVERS SEMICONDUCTORS AB |
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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