Correlation Between TOWNSQUARE MEDIA and Kingdee International
Can any of the company-specific risk be diversified away by investing in both TOWNSQUARE MEDIA and Kingdee International 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 Kingdee International 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 Kingdee International Software, you can compare the effects of market volatilities on TOWNSQUARE MEDIA and Kingdee International 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 Kingdee International. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOWNSQUARE MEDIA and Kingdee International.
Diversification Opportunities for TOWNSQUARE MEDIA and Kingdee International
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between TOWNSQUARE and Kingdee is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding TOWNSQUARE MEDIA INC and Kingdee International Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingdee International 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 Kingdee International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingdee International has no effect on the direction of TOWNSQUARE MEDIA i.e., TOWNSQUARE MEDIA and Kingdee International go up and down completely randomly.
Pair Corralation between TOWNSQUARE MEDIA and Kingdee International
Assuming the 90 days trading horizon TOWNSQUARE MEDIA INC is expected to generate 0.67 times more return on investment than Kingdee International. However, TOWNSQUARE MEDIA INC is 1.5 times less risky than Kingdee International. It trades about 0.03 of its potential returns per unit of risk. Kingdee International Software is currently generating about 0.0 per unit of risk. If you would invest 670.00 in TOWNSQUARE MEDIA INC on November 1, 2024 and sell it today you would earn a total of 180.00 from holding TOWNSQUARE MEDIA INC or generate 26.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
TOWNSQUARE MEDIA INC vs. Kingdee International Software
Performance |
| Timeline |
| TOWNSQUARE MEDIA INC |
| Kingdee International |
TOWNSQUARE MEDIA and Kingdee International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOWNSQUARE MEDIA and Kingdee International
The main advantage of trading using opposite TOWNSQUARE MEDIA and Kingdee International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOWNSQUARE MEDIA position performs unexpectedly, Kingdee International 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 Kingdee International will offset losses from the drop in Kingdee International's long position.| TOWNSQUARE MEDIA vs. Kingdee International Software | TOWNSQUARE MEDIA vs. Spirent Communications plc | TOWNSQUARE MEDIA vs. Wayside Technology Group | TOWNSQUARE MEDIA vs. Chengdu PUTIAN Telecommunications |
| Kingdee International vs. PRECISION DRILLING P | Kingdee International vs. H2O Retailing | Kingdee International vs. CSSC Offshore Marine | Kingdee International vs. Tradegate AG Wertpapierhandelsbank |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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