Correlation Between National Retail and Townsquare Media
Can any of the company-specific risk be diversified away by investing in both National Retail 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 National Retail and Townsquare Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Retail Properties and Townsquare Media, you can compare the effects of market volatilities on National Retail 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 National Retail with a short position of Townsquare Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Retail and Townsquare Media.
Diversification Opportunities for National Retail and Townsquare Media
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and Townsquare is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding National Retail Properties and Townsquare Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Townsquare Media and National Retail 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 National Retail Properties 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 National Retail i.e., National Retail and Townsquare Media go up and down completely randomly.
Pair Corralation between National Retail and Townsquare Media
Assuming the 90 days trading horizon National Retail Properties is expected to generate 0.55 times more return on investment than Townsquare Media. However, National Retail Properties is 1.81 times less risky than Townsquare Media. It trades about 0.06 of its potential returns per unit of risk. Townsquare Media is currently generating about 0.03 per unit of risk. If you would invest 3,026 in National Retail Properties on November 1, 2024 and sell it today you would earn a total of 747.00 from holding National Retail Properties or generate 24.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Retail Properties vs. Townsquare Media
Performance |
| Timeline |
| National Retail Prop |
| Townsquare Media |
National Retail and Townsquare Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Retail and Townsquare Media
The main advantage of trading using opposite National Retail and Townsquare Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Retail 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.| National Retail vs. FANDIFI TECHNOLOGY P | National Retail vs. Align Technology | National Retail vs. Sunny Optical Technology | National Retail vs. Salesforce |
| Townsquare Media vs. Sekisui Chemical Co | Townsquare Media vs. THRACE PLASTICS | Townsquare Media vs. Mitsubishi Gas Chemical | Townsquare Media vs. Eastman Chemical |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |