Correlation Between TOWNSQUARE MEDIA and PARKEN Sport
Can any of the company-specific risk be diversified away by investing in both TOWNSQUARE MEDIA and PARKEN Sport 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 PARKEN Sport 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 PARKEN Sport Entertainment, you can compare the effects of market volatilities on TOWNSQUARE MEDIA and PARKEN Sport 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 PARKEN Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOWNSQUARE MEDIA and PARKEN Sport.
Diversification Opportunities for TOWNSQUARE MEDIA and PARKEN Sport
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TOWNSQUARE and PARKEN is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding TOWNSQUARE MEDIA INC and PARKEN Sport Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PARKEN Sport Enterta 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 PARKEN Sport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PARKEN Sport Enterta has no effect on the direction of TOWNSQUARE MEDIA i.e., TOWNSQUARE MEDIA and PARKEN Sport go up and down completely randomly.
Pair Corralation between TOWNSQUARE MEDIA and PARKEN Sport
Assuming the 90 days trading horizon TOWNSQUARE MEDIA is expected to generate 6.78 times less return on investment than PARKEN Sport. But when comparing it to its historical volatility, TOWNSQUARE MEDIA INC is 3.7 times less risky than PARKEN Sport. It trades about 0.03 of its potential returns per unit of risk. PARKEN Sport Entertainment is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 753.00 in PARKEN Sport Entertainment on August 26, 2024 and sell it today you would earn a total of 862.00 from holding PARKEN Sport Entertainment or generate 114.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TOWNSQUARE MEDIA INC vs. PARKEN Sport Entertainment
Performance |
| Timeline |
| TOWNSQUARE MEDIA INC |
| PARKEN Sport Enterta |
TOWNSQUARE MEDIA and PARKEN Sport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOWNSQUARE MEDIA and PARKEN Sport
The main advantage of trading using opposite TOWNSQUARE MEDIA and PARKEN Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOWNSQUARE MEDIA position performs unexpectedly, PARKEN Sport 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 PARKEN Sport will offset losses from the drop in PARKEN Sport's long position.| TOWNSQUARE MEDIA vs. Apple Inc | TOWNSQUARE MEDIA vs. Apple Inc | TOWNSQUARE MEDIA vs. Apple Inc | TOWNSQUARE MEDIA vs. Apple Inc |
| PARKEN Sport vs. The Walt Disney | PARKEN Sport vs. Superior Plus Corp | PARKEN Sport vs. NMI Holdings | PARKEN Sport vs. Origin Agritech |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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