Correlation Between Townsquare Media and Deutsche Telekom
Can any of the company-specific risk be diversified away by investing in both Townsquare Media and Deutsche Telekom 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 Deutsche Telekom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Townsquare Media and Deutsche Telekom AG, you can compare the effects of market volatilities on Townsquare Media and Deutsche Telekom 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 Deutsche Telekom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Townsquare Media and Deutsche Telekom.
Diversification Opportunities for Townsquare Media and Deutsche Telekom
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Townsquare and Deutsche is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Townsquare Media and Deutsche Telekom AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Telekom 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 Deutsche Telekom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Telekom has no effect on the direction of Townsquare Media i.e., Townsquare Media and Deutsche Telekom go up and down completely randomly.
Pair Corralation between Townsquare Media and Deutsche Telekom
Assuming the 90 days horizon Townsquare Media is expected to under-perform the Deutsche Telekom. In addition to that, Townsquare Media is 2.95 times more volatile than Deutsche Telekom AG. It trades about -0.04 of its total potential returns per unit of risk. Deutsche Telekom AG is currently generating about 0.23 per unit of volatility. If you would invest 2,088 in Deutsche Telekom AG on October 14, 2024 and sell it today you would earn a total of 856.00 from holding Deutsche Telekom AG or generate 41.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Townsquare Media vs. Deutsche Telekom AG
Performance |
| Timeline |
| Townsquare Media |
| Deutsche Telekom |
Townsquare Media and Deutsche Telekom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Townsquare Media and Deutsche Telekom
The main advantage of trading using opposite Townsquare Media and Deutsche Telekom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Townsquare Media position performs unexpectedly, Deutsche Telekom 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 Deutsche Telekom will offset losses from the drop in Deutsche Telekom's long position.| Townsquare Media vs. Lyxor 1 | Townsquare Media vs. Xtrackers LevDAX | Townsquare Media vs. Xtrackers ShortDAX |
| Deutsche Telekom vs. BANKINTER ADR 2007 | Deutsche Telekom vs. The Hanover Insurance | Deutsche Telekom vs. GigaMedia | Deutsche Telekom vs. Townsquare Media |
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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