Correlation Between TOWNSQUARE MEDIA and GEELY AUTOMOBILE
Can any of the company-specific risk be diversified away by investing in both TOWNSQUARE MEDIA and GEELY AUTOMOBILE 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 GEELY AUTOMOBILE 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 GEELY AUTOMOBILE, you can compare the effects of market volatilities on TOWNSQUARE MEDIA and GEELY AUTOMOBILE 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 GEELY AUTOMOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOWNSQUARE MEDIA and GEELY AUTOMOBILE.
Diversification Opportunities for TOWNSQUARE MEDIA and GEELY AUTOMOBILE
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between TOWNSQUARE and GEELY is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding TOWNSQUARE MEDIA INC and GEELY AUTOMOBILE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEELY AUTOMOBILE 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 GEELY AUTOMOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEELY AUTOMOBILE has no effect on the direction of TOWNSQUARE MEDIA i.e., TOWNSQUARE MEDIA and GEELY AUTOMOBILE go up and down completely randomly.
Pair Corralation between TOWNSQUARE MEDIA and GEELY AUTOMOBILE
Assuming the 90 days trading horizon TOWNSQUARE MEDIA INC is expected to under-perform the GEELY AUTOMOBILE. In addition to that, TOWNSQUARE MEDIA is 1.54 times more volatile than GEELY AUTOMOBILE. It trades about -0.06 of its total potential returns per unit of risk. GEELY AUTOMOBILE is currently generating about 0.06 per unit of volatility. If you would invest 176.00 in GEELY AUTOMOBILE on November 4, 2024 and sell it today you would earn a total of 3.00 from holding GEELY AUTOMOBILE or generate 1.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TOWNSQUARE MEDIA INC vs. GEELY AUTOMOBILE
Performance |
| Timeline |
| TOWNSQUARE MEDIA INC |
| GEELY AUTOMOBILE |
TOWNSQUARE MEDIA and GEELY AUTOMOBILE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOWNSQUARE MEDIA and GEELY AUTOMOBILE
The main advantage of trading using opposite TOWNSQUARE MEDIA and GEELY AUTOMOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOWNSQUARE MEDIA position performs unexpectedly, GEELY AUTOMOBILE 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 GEELY AUTOMOBILE will offset losses from the drop in GEELY AUTOMOBILE's long position.| TOWNSQUARE MEDIA vs. HOCHSCHILD MINING | TOWNSQUARE MEDIA vs. ecotel communication ag | TOWNSQUARE MEDIA vs. Verizon Communications | TOWNSQUARE MEDIA vs. COMBA TELECOM SYST |
| GEELY AUTOMOBILE vs. Molson Coors Beverage | GEELY AUTOMOBILE vs. PLAYMATES TOYS | GEELY AUTOMOBILE vs. US FOODS HOLDING | GEELY AUTOMOBILE vs. PATTIES FOODS |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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