Correlation Between Townsquare Media and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both Townsquare Media and Aegean Airlines 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 Aegean Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Townsquare Media and Aegean Airlines SA, you can compare the effects of market volatilities on Townsquare Media and Aegean Airlines 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 Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Townsquare Media and Aegean Airlines.
Diversification Opportunities for Townsquare Media and Aegean Airlines
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Townsquare and Aegean is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Townsquare Media and Aegean Airlines SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegean Airlines SA 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 are associated (or correlated) with Aegean Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegean Airlines SA has no effect on the direction of Townsquare Media i.e., Townsquare Media and Aegean Airlines go up and down completely randomly.
Pair Corralation between Townsquare Media and Aegean Airlines
Assuming the 90 days horizon Townsquare Media is expected to generate 0.85 times more return on investment than Aegean Airlines. However, Townsquare Media is 1.17 times less risky than Aegean Airlines. It trades about -0.12 of its potential returns per unit of risk. Aegean Airlines SA is currently generating about -0.13 per unit of risk. If you would invest 935.00 in Townsquare Media on August 29, 2024 and sell it today you would lose (40.00) from holding Townsquare Media or give up 4.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Townsquare Media vs. Aegean Airlines SA
Performance |
| Timeline |
| Townsquare Media |
| Aegean Airlines SA |
Townsquare Media and Aegean Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Townsquare Media and Aegean Airlines
The main advantage of trading using opposite Townsquare Media and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Townsquare Media position performs unexpectedly, Aegean Airlines 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 Aegean Airlines will offset losses from the drop in Aegean Airlines' long position.| Townsquare Media vs. Align Technology | Townsquare Media vs. Westinghouse Air Brake | Townsquare Media vs. Fair Isaac Corp | Townsquare Media vs. DELTA AIR LINES |
| Aegean Airlines vs. Ryanair Holdings plc | Aegean Airlines vs. Superior Plus Corp | Aegean Airlines vs. NMI Holdings | Aegean Airlines vs. Origin Agritech |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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