Correlation Between Expand Energy and Townsquare Media
Can any of the company-specific risk be diversified away by investing in both Expand Energy 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 Expand Energy and Townsquare Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Expand Energy and Townsquare Media, you can compare the effects of market volatilities on Expand Energy 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 Expand Energy with a short position of Townsquare Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Expand Energy and Townsquare Media.
Diversification Opportunities for Expand Energy and Townsquare Media
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Expand and Townsquare is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Expand Energy and Townsquare Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Townsquare Media and Expand Energy 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 Expand Energy 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 Expand Energy i.e., Expand Energy and Townsquare Media go up and down completely randomly.
Pair Corralation between Expand Energy and Townsquare Media
Assuming the 90 days horizon Expand Energy is expected to generate 1.76 times more return on investment than Townsquare Media. However, Expand Energy is 1.76 times more volatile than Townsquare Media. It trades about 0.22 of its potential returns per unit of risk. Townsquare Media is currently generating about 0.11 per unit of risk. If you would invest 7,473 in Expand Energy on September 3, 2024 and sell it today you would earn a total of 1,049 from holding Expand Energy or generate 14.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Expand Energy vs. Townsquare Media
Performance |
| Timeline |
| Expand Energy |
| Townsquare Media |
Expand Energy and Townsquare Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Expand Energy and Townsquare Media
The main advantage of trading using opposite Expand Energy and Townsquare Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expand Energy 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.| Expand Energy vs. Dominos Pizza | Expand Energy vs. Aegon NV ADR | Expand Energy vs. The Cheesecake Factory | Expand Energy vs. Guangdong Investment Limited |
| Townsquare Media vs. Mirriad Advertising plc | Townsquare Media vs. INEO Tech Corp | Townsquare Media vs. Kidoz Inc | Townsquare Media vs. Marchex |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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