Correlation Between Townsquare Media and X FAB
Can any of the company-specific risk be diversified away by investing in both Townsquare Media and X FAB 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 X FAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Townsquare Media and X FAB Silicon Foundries, you can compare the effects of market volatilities on Townsquare Media and X FAB 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 X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Townsquare Media and X FAB.
Diversification Opportunities for Townsquare Media and X FAB
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Townsquare and XFB is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Townsquare Media and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 X FAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of Townsquare Media i.e., Townsquare Media and X FAB go up and down completely randomly.
Pair Corralation between Townsquare Media and X FAB
Assuming the 90 days horizon Townsquare Media is expected to under-perform the X FAB. But the stock apears to be less risky and, when comparing its historical volatility, Townsquare Media is 1.23 times less risky than X FAB. The stock trades about -0.04 of its potential returns per unit of risk. The X FAB Silicon Foundries is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 539.00 in X FAB Silicon Foundries on November 7, 2024 and sell it today you would lose (47.00) from holding X FAB Silicon Foundries or give up 8.72% 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. X FAB Silicon Foundries
Performance |
| Timeline |
| Townsquare Media |
| X FAB Silicon |
Townsquare Media and X FAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Townsquare Media and X FAB
The main advantage of trading using opposite Townsquare Media and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Townsquare Media position performs unexpectedly, X FAB 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 X FAB will offset losses from the drop in X FAB's long position.| Townsquare Media vs. Wayside Technology Group | Townsquare Media vs. Cognizant Technology Solutions | Townsquare Media vs. Scottish Mortgage Investment | Townsquare Media vs. CDL INVESTMENT |
| X FAB vs. MOLSON RS BEVERAGE | X FAB vs. CAL MAINE FOODS | X FAB vs. GBS Software AG | X FAB vs. Magic Software Enterprises |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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