Correlation Between FEMALE HEALTH and Townsquare Media
Can any of the company-specific risk be diversified away by investing in both FEMALE HEALTH 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 FEMALE HEALTH and Townsquare Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FEMALE HEALTH and Townsquare Media, you can compare the effects of market volatilities on FEMALE HEALTH 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 FEMALE HEALTH with a short position of Townsquare Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of FEMALE HEALTH and Townsquare Media.
Diversification Opportunities for FEMALE HEALTH and Townsquare Media
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FEMALE and Townsquare is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding FEMALE HEALTH and Townsquare Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Townsquare Media and FEMALE HEALTH 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 FEMALE HEALTH 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 FEMALE HEALTH i.e., FEMALE HEALTH and Townsquare Media go up and down completely randomly.
Pair Corralation between FEMALE HEALTH and Townsquare Media
Assuming the 90 days trading horizon FEMALE HEALTH is expected to generate 1.82 times more return on investment than Townsquare Media. However, FEMALE HEALTH is 1.82 times more volatile than Townsquare Media. It trades about 0.09 of its potential returns per unit of risk. Townsquare Media is currently generating about -0.01 per unit of risk. If you would invest 67.00 in FEMALE HEALTH on October 19, 2024 and sell it today you would earn a total of 4.00 from holding FEMALE HEALTH or generate 5.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FEMALE HEALTH vs. Townsquare Media
Performance |
| Timeline |
| FEMALE HEALTH |
| Townsquare Media |
FEMALE HEALTH and Townsquare Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FEMALE HEALTH and Townsquare Media
The main advantage of trading using opposite FEMALE HEALTH and Townsquare Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FEMALE HEALTH 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.| FEMALE HEALTH vs. BOSTON BEER A | FEMALE HEALTH vs. Cass Information Systems | FEMALE HEALTH vs. MICRONIC MYDATA | FEMALE HEALTH vs. SAN MIGUEL BREWERY |
| Townsquare Media vs. SWISS WATER DECAFFCOFFEE | Townsquare Media vs. Yuexiu Transport Infrastructure | Townsquare Media vs. FEMALE HEALTH | Townsquare Media vs. RCI Hospitality Holdings |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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