Correlation Between Townsquare Media and SENECA FOODS-A
Can any of the company-specific risk be diversified away by investing in both Townsquare Media and SENECA FOODS-A 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 SENECA FOODS-A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Townsquare Media and SENECA FOODS A, you can compare the effects of market volatilities on Townsquare Media and SENECA FOODS-A 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 SENECA FOODS-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Townsquare Media and SENECA FOODS-A.
Diversification Opportunities for Townsquare Media and SENECA FOODS-A
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Townsquare and SENECA is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Townsquare Media and SENECA FOODS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SENECA FOODS A 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 SENECA FOODS-A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SENECA FOODS A has no effect on the direction of Townsquare Media i.e., Townsquare Media and SENECA FOODS-A go up and down completely randomly.
Pair Corralation between Townsquare Media and SENECA FOODS-A
Assuming the 90 days horizon Townsquare Media is expected to generate 3.75 times less return on investment than SENECA FOODS-A. In addition to that, Townsquare Media is 1.02 times more volatile than SENECA FOODS A. It trades about 0.02 of its total potential returns per unit of risk. SENECA FOODS A is currently generating about 0.09 per unit of volatility. If you would invest 4,460 in SENECA FOODS A on September 4, 2024 and sell it today you would earn a total of 2,290 from holding SENECA FOODS A or generate 51.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Townsquare Media vs. SENECA FOODS A
Performance |
| Timeline |
| Townsquare Media |
| SENECA FOODS A |
Townsquare Media and SENECA FOODS-A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Townsquare Media and SENECA FOODS-A
The main advantage of trading using opposite Townsquare Media and SENECA FOODS-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Townsquare Media position performs unexpectedly, SENECA FOODS-A 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 SENECA FOODS-A will offset losses from the drop in SENECA FOODS-A's long position.| Townsquare Media vs. SENECA FOODS A | Townsquare Media vs. EBRO FOODS | Townsquare Media vs. United Natural Foods | Townsquare Media vs. Ameriprise Financial |
| SENECA FOODS-A vs. TOTAL GABON | SENECA FOODS-A vs. Walgreens Boots Alliance | SENECA FOODS-A vs. Peak Resources Limited |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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