Correlation Between TOWNSQUARE MEDIA and KOOL2PLAY
Can any of the company-specific risk be diversified away by investing in both TOWNSQUARE MEDIA and KOOL2PLAY 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 KOOL2PLAY 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 KOOL2PLAY SA ZY, you can compare the effects of market volatilities on TOWNSQUARE MEDIA and KOOL2PLAY 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 KOOL2PLAY. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOWNSQUARE MEDIA and KOOL2PLAY.
Diversification Opportunities for TOWNSQUARE MEDIA and KOOL2PLAY
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between TOWNSQUARE and KOOL2PLAY is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding TOWNSQUARE MEDIA INC and KOOL2PLAY SA ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KOOL2PLAY SA ZY 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 KOOL2PLAY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KOOL2PLAY SA ZY has no effect on the direction of TOWNSQUARE MEDIA i.e., TOWNSQUARE MEDIA and KOOL2PLAY go up and down completely randomly.
Pair Corralation between TOWNSQUARE MEDIA and KOOL2PLAY
Assuming the 90 days trading horizon TOWNSQUARE MEDIA INC is expected to generate 0.42 times more return on investment than KOOL2PLAY. However, TOWNSQUARE MEDIA INC is 2.36 times less risky than KOOL2PLAY. It trades about -0.05 of its potential returns per unit of risk. KOOL2PLAY SA ZY is currently generating about -0.22 per unit of risk. If you would invest 935.00 in TOWNSQUARE MEDIA INC on October 10, 2024 and sell it today you would lose (25.00) from holding TOWNSQUARE MEDIA INC or give up 2.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TOWNSQUARE MEDIA INC vs. KOOL2PLAY SA ZY
Performance |
| Timeline |
| TOWNSQUARE MEDIA INC |
| KOOL2PLAY SA ZY |
TOWNSQUARE MEDIA and KOOL2PLAY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOWNSQUARE MEDIA and KOOL2PLAY
The main advantage of trading using opposite TOWNSQUARE MEDIA and KOOL2PLAY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOWNSQUARE MEDIA position performs unexpectedly, KOOL2PLAY 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 KOOL2PLAY will offset losses from the drop in KOOL2PLAY's long position.| TOWNSQUARE MEDIA vs. InterContinental Hotels Group | TOWNSQUARE MEDIA vs. Daito Trust Construction | TOWNSQUARE MEDIA vs. WIMFARM SA EO | TOWNSQUARE MEDIA vs. Pebblebrook Hotel Trust |
| KOOL2PLAY vs. Sunny Optical Technology | KOOL2PLAY vs. AEON STORES | KOOL2PLAY vs. GLG LIFE TECH | KOOL2PLAY vs. FAST RETAIL ADR |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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