Correlation Between TOWNSQUARE MEDIA and Diamyd Medical
Can any of the company-specific risk be diversified away by investing in both TOWNSQUARE MEDIA and Diamyd Medical 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 Diamyd Medical 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 Diamyd Medical AB, you can compare the effects of market volatilities on TOWNSQUARE MEDIA and Diamyd Medical 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 Diamyd Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOWNSQUARE MEDIA and Diamyd Medical.
Diversification Opportunities for TOWNSQUARE MEDIA and Diamyd Medical
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TOWNSQUARE and Diamyd is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding TOWNSQUARE MEDIA INC and Diamyd Medical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamyd Medical AB 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 Diamyd Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamyd Medical AB has no effect on the direction of TOWNSQUARE MEDIA i.e., TOWNSQUARE MEDIA and Diamyd Medical go up and down completely randomly.
Pair Corralation between TOWNSQUARE MEDIA and Diamyd Medical
Assuming the 90 days trading horizon TOWNSQUARE MEDIA is expected to generate 1.5 times less return on investment than Diamyd Medical. But when comparing it to its historical volatility, TOWNSQUARE MEDIA INC is 2.08 times less risky than Diamyd Medical. It trades about 0.04 of its potential returns per unit of risk. Diamyd Medical AB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 137.00 in Diamyd Medical AB on October 12, 2024 and sell it today you would earn a total of 19.00 from holding Diamyd Medical AB or generate 13.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TOWNSQUARE MEDIA INC vs. Diamyd Medical AB
Performance |
| Timeline |
| TOWNSQUARE MEDIA INC |
| Diamyd Medical AB |
TOWNSQUARE MEDIA and Diamyd Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOWNSQUARE MEDIA and Diamyd Medical
The main advantage of trading using opposite TOWNSQUARE MEDIA and Diamyd Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOWNSQUARE MEDIA position performs unexpectedly, Diamyd Medical 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 Diamyd Medical will offset losses from the drop in Diamyd Medical's long position.| TOWNSQUARE MEDIA vs. American Eagle Outfitters | TOWNSQUARE MEDIA vs. Sun Life Financial | TOWNSQUARE MEDIA vs. REVO INSURANCE SPA | TOWNSQUARE MEDIA vs. UNIQA INSURANCE GR |
| Diamyd Medical vs. TOWNSQUARE MEDIA INC | Diamyd Medical vs. PENN Entertainment | Diamyd Medical vs. GOODYEAR T RUBBER | Diamyd Medical vs. Ubisoft Entertainment SA |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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