Correlation Between Chuangs China and Townsquare Media
Can any of the company-specific risk be diversified away by investing in both Chuangs China and Townsquare Media 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 Chuangs China and Townsquare Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chuangs China Investments and Townsquare Media, you can compare the effects of market volatilities on Chuangs China and Townsquare Media 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 Chuangs China with a short position of Townsquare Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chuangs China and Townsquare Media.
Diversification Opportunities for Chuangs China and Townsquare Media
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chuangs and Townsquare is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Chuangs China Investments and Townsquare Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Townsquare Media and Chuangs China 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 Chuangs China Investments are associated (or correlated) with Townsquare Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Townsquare Media has no effect on the direction of Chuangs China i.e., Chuangs China and Townsquare Media go up and down completely randomly.
Pair Corralation between Chuangs China and Townsquare Media
If you would invest 1.00 in Chuangs China Investments on October 14, 2024 and sell it today you would earn a total of 0.00 from holding Chuangs China Investments or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chuangs China Investments vs. Townsquare Media
Performance |
| Timeline |
| Chuangs China Investments |
| Townsquare Media |
Chuangs China and Townsquare Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chuangs China and Townsquare Media
The main advantage of trading using opposite Chuangs China and Townsquare Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chuangs China position performs unexpectedly, Townsquare Media 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 Townsquare Media will offset losses from the drop in Townsquare Media's long position.| Chuangs China vs. Performance Food Group | Chuangs China vs. UNITED UTILITIES GR | Chuangs China vs. Eidesvik Offshore ASA | Chuangs China vs. Nomad Foods |
| Townsquare Media vs. EAT WELL INVESTMENT | Townsquare Media vs. Axway Software SA | Townsquare Media vs. Take Two Interactive Software | Townsquare Media vs. Chuangs China Investments |
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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