Correlation Between TOWNSQUARE MEDIA and PENN Entertainment
Can any of the company-specific risk be diversified away by investing in both TOWNSQUARE MEDIA and PENN Entertainment 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 PENN Entertainment 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 PENN Entertainment, you can compare the effects of market volatilities on TOWNSQUARE MEDIA and PENN Entertainment 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 PENN Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOWNSQUARE MEDIA and PENN Entertainment.
Diversification Opportunities for TOWNSQUARE MEDIA and PENN Entertainment
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between TOWNSQUARE and PENN is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding TOWNSQUARE MEDIA INC and PENN Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PENN Entertainment 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 PENN Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PENN Entertainment has no effect on the direction of TOWNSQUARE MEDIA i.e., TOWNSQUARE MEDIA and PENN Entertainment go up and down completely randomly.
Pair Corralation between TOWNSQUARE MEDIA and PENN Entertainment
Assuming the 90 days trading horizon TOWNSQUARE MEDIA INC is expected to under-perform the PENN Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, TOWNSQUARE MEDIA INC is 1.32 times less risky than PENN Entertainment. The stock trades about -0.19 of its potential returns per unit of risk. The PENN Entertainment is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,879 in PENN Entertainment on October 16, 2024 and sell it today you would earn a total of 64.00 from holding PENN Entertainment or generate 3.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.12% |
| Values | Daily Returns |
TOWNSQUARE MEDIA INC vs. PENN Entertainment
Performance |
| Timeline |
| TOWNSQUARE MEDIA INC |
| PENN Entertainment |
TOWNSQUARE MEDIA and PENN Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOWNSQUARE MEDIA and PENN Entertainment
The main advantage of trading using opposite TOWNSQUARE MEDIA and PENN Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOWNSQUARE MEDIA position performs unexpectedly, PENN Entertainment 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 PENN Entertainment will offset losses from the drop in PENN Entertainment's long position.| TOWNSQUARE MEDIA vs. Yuexiu Transport Infrastructure | TOWNSQUARE MEDIA vs. Inspire Medical Systems | TOWNSQUARE MEDIA vs. AEON METALS LTD | TOWNSQUARE MEDIA vs. ADRIATIC METALS LS 013355 |
| PENN Entertainment vs. Information Services International Dentsu | PENN Entertainment vs. Data Modul AG | PENN Entertainment vs. SILVER BULLET DATA | PENN Entertainment vs. CONTAGIOUS GAMING INC |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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