Correlation Between TOWNSQUARE MEDIA and COVIVIO HOTELS
Can any of the company-specific risk be diversified away by investing in both TOWNSQUARE MEDIA and COVIVIO HOTELS 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 COVIVIO HOTELS 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 COVIVIO HOTELS INH, you can compare the effects of market volatilities on TOWNSQUARE MEDIA and COVIVIO HOTELS 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 COVIVIO HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOWNSQUARE MEDIA and COVIVIO HOTELS.
Diversification Opportunities for TOWNSQUARE MEDIA and COVIVIO HOTELS
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TOWNSQUARE and COVIVIO is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding TOWNSQUARE MEDIA INC and COVIVIO HOTELS INH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COVIVIO HOTELS INH 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 COVIVIO HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COVIVIO HOTELS INH has no effect on the direction of TOWNSQUARE MEDIA i.e., TOWNSQUARE MEDIA and COVIVIO HOTELS go up and down completely randomly.
Pair Corralation between TOWNSQUARE MEDIA and COVIVIO HOTELS
Assuming the 90 days trading horizon TOWNSQUARE MEDIA INC is expected to generate 3.12 times more return on investment than COVIVIO HOTELS. However, TOWNSQUARE MEDIA is 3.12 times more volatile than COVIVIO HOTELS INH. It trades about -0.02 of its potential returns per unit of risk. COVIVIO HOTELS INH is currently generating about -0.25 per unit of risk. If you would invest 890.00 in TOWNSQUARE MEDIA INC on November 8, 2024 and sell it today you would lose (15.00) from holding TOWNSQUARE MEDIA INC or give up 1.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
TOWNSQUARE MEDIA INC vs. COVIVIO HOTELS INH
Performance |
| Timeline |
| TOWNSQUARE MEDIA INC |
| COVIVIO HOTELS INH |
TOWNSQUARE MEDIA and COVIVIO HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOWNSQUARE MEDIA and COVIVIO HOTELS
The main advantage of trading using opposite TOWNSQUARE MEDIA and COVIVIO HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOWNSQUARE MEDIA position performs unexpectedly, COVIVIO HOTELS 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 COVIVIO HOTELS will offset losses from the drop in COVIVIO HOTELS's long position.| TOWNSQUARE MEDIA vs. ZhongAn Online P | TOWNSQUARE MEDIA vs. Hitachi Construction Machinery | TOWNSQUARE MEDIA vs. North American Construction | TOWNSQUARE MEDIA vs. YATRA ONLINE DL 0001 |
| COVIVIO HOTELS vs. Apollo Medical Holdings | COVIVIO HOTELS vs. CVR Medical Corp | COVIVIO HOTELS vs. PULSION Medical Systems | COVIVIO HOTELS vs. Cardinal Health |
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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