Correlation Between TOWNSQUARE MEDIA and Nufarm
Can any of the company-specific risk be diversified away by investing in both TOWNSQUARE MEDIA and Nufarm 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 Nufarm 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 Nufarm Limited, you can compare the effects of market volatilities on TOWNSQUARE MEDIA and Nufarm 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 Nufarm. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOWNSQUARE MEDIA and Nufarm.
Diversification Opportunities for TOWNSQUARE MEDIA and Nufarm
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between TOWNSQUARE and Nufarm is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding TOWNSQUARE MEDIA INC and Nufarm Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nufarm Limited 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 Nufarm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nufarm Limited has no effect on the direction of TOWNSQUARE MEDIA i.e., TOWNSQUARE MEDIA and Nufarm go up and down completely randomly.
Pair Corralation between TOWNSQUARE MEDIA and Nufarm
Assuming the 90 days trading horizon TOWNSQUARE MEDIA INC is expected to generate 0.82 times more return on investment than Nufarm. However, TOWNSQUARE MEDIA INC is 1.21 times less risky than Nufarm. It trades about 0.08 of its potential returns per unit of risk. Nufarm Limited is currently generating about 0.01 per unit of risk. If you would invest 900.00 in TOWNSQUARE MEDIA INC on September 2, 2024 and sell it today you would earn a total of 25.00 from holding TOWNSQUARE MEDIA INC or generate 2.78% 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. Nufarm Limited
Performance |
| Timeline |
| TOWNSQUARE MEDIA INC |
| Nufarm Limited |
TOWNSQUARE MEDIA and Nufarm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOWNSQUARE MEDIA and Nufarm
The main advantage of trading using opposite TOWNSQUARE MEDIA and Nufarm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOWNSQUARE MEDIA position performs unexpectedly, Nufarm 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 Nufarm will offset losses from the drop in Nufarm's long position.| TOWNSQUARE MEDIA vs. SIVERS SEMICONDUCTORS AB | TOWNSQUARE MEDIA vs. Darden Restaurants | TOWNSQUARE MEDIA vs. Reliance Steel Aluminum | TOWNSQUARE MEDIA vs. Q2M Managementberatung AG |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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