Correlation Between TOWNSQUARE MEDIA and TriMas
Can any of the company-specific risk be diversified away by investing in both TOWNSQUARE MEDIA and TriMas 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 TriMas 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 TriMas, you can compare the effects of market volatilities on TOWNSQUARE MEDIA and TriMas 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 TriMas. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOWNSQUARE MEDIA and TriMas.
Diversification Opportunities for TOWNSQUARE MEDIA and TriMas
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TOWNSQUARE and TriMas is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding TOWNSQUARE MEDIA INC and TriMas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TriMas 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 TriMas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TriMas has no effect on the direction of TOWNSQUARE MEDIA i.e., TOWNSQUARE MEDIA and TriMas go up and down completely randomly.
Pair Corralation between TOWNSQUARE MEDIA and TriMas
Assuming the 90 days trading horizon TOWNSQUARE MEDIA INC is expected to generate 0.7 times more return on investment than TriMas. However, TOWNSQUARE MEDIA INC is 1.43 times less risky than TriMas. It trades about -0.02 of its potential returns per unit of risk. TriMas is currently generating about -0.1 per unit of risk. If you would invest 890.00 in TOWNSQUARE MEDIA INC on October 24, 2024 and sell it today you would lose (15.00) from holding TOWNSQUARE MEDIA INC or give up 1.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TOWNSQUARE MEDIA INC vs. TriMas
Performance |
| Timeline |
| TOWNSQUARE MEDIA INC |
| TriMas |
TOWNSQUARE MEDIA and TriMas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOWNSQUARE MEDIA and TriMas
The main advantage of trading using opposite TOWNSQUARE MEDIA and TriMas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOWNSQUARE MEDIA position performs unexpectedly, TriMas 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 TriMas will offset losses from the drop in TriMas' long position.| TOWNSQUARE MEDIA vs. CLOVER HEALTH INV | TOWNSQUARE MEDIA vs. Wizz Air Holdings | TOWNSQUARE MEDIA vs. Air New Zealand | TOWNSQUARE MEDIA vs. Pentair plc |
| TriMas vs. Synovus Financial Corp | TriMas vs. REVO INSURANCE SPA | TriMas vs. Webster Financial | TriMas vs. TIANDE CHEMICAL |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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