Correlation Between Townsquare Media and WIMFARM SA
Can any of the company-specific risk be diversified away by investing in both Townsquare Media and WIMFARM SA 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 WIMFARM SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Townsquare Media and WIMFARM SA EO, you can compare the effects of market volatilities on Townsquare Media and WIMFARM SA 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 WIMFARM SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Townsquare Media and WIMFARM SA.
Diversification Opportunities for Townsquare Media and WIMFARM SA
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Townsquare and WIMFARM is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Townsquare Media and WIMFARM SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIMFARM SA EO 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 WIMFARM SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIMFARM SA EO has no effect on the direction of Townsquare Media i.e., Townsquare Media and WIMFARM SA go up and down completely randomly.
Pair Corralation between Townsquare Media and WIMFARM SA
Assuming the 90 days horizon Townsquare Media is expected to under-perform the WIMFARM SA. But the stock apears to be less risky and, when comparing its historical volatility, Townsquare Media is 1.9 times less risky than WIMFARM SA. The stock trades about -0.06 of its potential returns per unit of risk. The WIMFARM SA EO is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 345.00 in WIMFARM SA EO on November 4, 2024 and sell it today you would lose (6.00) from holding WIMFARM SA EO or give up 1.74% 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. WIMFARM SA EO
Performance |
| Timeline |
| Townsquare Media |
| WIMFARM SA EO |
Townsquare Media and WIMFARM SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Townsquare Media and WIMFARM SA
The main advantage of trading using opposite Townsquare Media and WIMFARM SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Townsquare Media position performs unexpectedly, WIMFARM SA 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 WIMFARM SA will offset losses from the drop in WIMFARM SA's long position.| Townsquare Media vs. The Boston Beer | Townsquare Media vs. RYANAIR HLDGS ADR | Townsquare Media vs. United Breweries Co | Townsquare Media vs. Suntory Beverage Food |
| WIMFARM SA vs. Spirent Communications plc | WIMFARM SA vs. Citic Telecom International | WIMFARM SA vs. THRACE PLASTICS | WIMFARM SA vs. Highlight Communications 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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