Correlation Between TOWNSQUARE MEDIA and Magna International
Can any of the company-specific risk be diversified away by investing in both TOWNSQUARE MEDIA and Magna 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 Magna 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 Magna International, you can compare the effects of market volatilities on TOWNSQUARE MEDIA and Magna 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 Magna International. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOWNSQUARE MEDIA and Magna International.
Diversification Opportunities for TOWNSQUARE MEDIA and Magna International
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between TOWNSQUARE and Magna is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding TOWNSQUARE MEDIA INC and Magna International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magna 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 Magna International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magna International has no effect on the direction of TOWNSQUARE MEDIA i.e., TOWNSQUARE MEDIA and Magna International go up and down completely randomly.
Pair Corralation between TOWNSQUARE MEDIA and Magna International
Assuming the 90 days trading horizon TOWNSQUARE MEDIA INC is expected to generate 1.77 times more return on investment than Magna International. However, TOWNSQUARE MEDIA is 1.77 times more volatile than Magna International. It trades about -0.05 of its potential returns per unit of risk. Magna International is currently generating about -0.12 per unit of risk. If you would invest 910.00 in TOWNSQUARE MEDIA INC on October 22, 2024 and sell it today you would lose (25.00) from holding TOWNSQUARE MEDIA INC or give up 2.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TOWNSQUARE MEDIA INC vs. Magna International
Performance |
| Timeline |
| TOWNSQUARE MEDIA INC |
| Magna International |
TOWNSQUARE MEDIA and Magna International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOWNSQUARE MEDIA and Magna International
The main advantage of trading using opposite TOWNSQUARE MEDIA and Magna International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOWNSQUARE MEDIA position performs unexpectedly, Magna 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 Magna International will offset losses from the drop in Magna International's long position.| TOWNSQUARE MEDIA vs. PENN Entertainment | TOWNSQUARE MEDIA vs. EMBARK EDUCATION LTD | TOWNSQUARE MEDIA vs. betterU Education Corp | TOWNSQUARE MEDIA vs. TAL Education Group |
| Magna International vs. NTT DATA | Magna International vs. JSC Halyk bank | Magna International vs. Teradata Corp | Magna International vs. Linedata Services 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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