Correlation Between Plastic Omnium and Townsquare Media
Can any of the company-specific risk be diversified away by investing in both Plastic Omnium 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 Plastic Omnium and Townsquare Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plastic Omnium and Townsquare Media, you can compare the effects of market volatilities on Plastic Omnium 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 Plastic Omnium with a short position of Townsquare Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plastic Omnium and Townsquare Media.
Diversification Opportunities for Plastic Omnium and Townsquare Media
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Plastic and Townsquare is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Plastic Omnium and Townsquare Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Townsquare Media and Plastic Omnium 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 Plastic Omnium 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 Plastic Omnium i.e., Plastic Omnium and Townsquare Media go up and down completely randomly.
Pair Corralation between Plastic Omnium and Townsquare Media
Assuming the 90 days trading horizon Plastic Omnium is expected to generate 1.12 times more return on investment than Townsquare Media. However, Plastic Omnium is 1.12 times more volatile than Townsquare Media. It trades about 0.13 of its potential returns per unit of risk. Townsquare Media is currently generating about 0.0 per unit of risk. If you would invest 995.00 in Plastic Omnium on October 31, 2024 and sell it today you would earn a total of 71.00 from holding Plastic Omnium or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plastic Omnium vs. Townsquare Media
Performance |
| Timeline |
| Plastic Omnium |
| Townsquare Media |
Plastic Omnium and Townsquare Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plastic Omnium and Townsquare Media
The main advantage of trading using opposite Plastic Omnium and Townsquare Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plastic Omnium 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.| Plastic Omnium vs. Adtalem Global Education | Plastic Omnium vs. ALBIS LEASING AG | Plastic Omnium vs. TAL Education Group | Plastic Omnium vs. EEDUCATION ALBERT AB |
| Townsquare Media vs. FAST RETAIL ADR | Townsquare Media vs. National Retail Properties | Townsquare Media vs. Apollo Investment Corp | Townsquare Media vs. Japan Asia Investment |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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