Correlation Between Iberdrola and TOWNSQUARE MEDIA
Can any of the company-specific risk be diversified away by investing in both Iberdrola 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 Iberdrola and TOWNSQUARE MEDIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iberdrola SA and TOWNSQUARE MEDIA INC, you can compare the effects of market volatilities on Iberdrola 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 Iberdrola with a short position of TOWNSQUARE MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iberdrola and TOWNSQUARE MEDIA.
Diversification Opportunities for Iberdrola and TOWNSQUARE MEDIA
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Iberdrola and TOWNSQUARE is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Iberdrola SA and TOWNSQUARE MEDIA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOWNSQUARE MEDIA INC and Iberdrola 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 Iberdrola SA 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 INC has no effect on the direction of Iberdrola i.e., Iberdrola and TOWNSQUARE MEDIA go up and down completely randomly.
Pair Corralation between Iberdrola and TOWNSQUARE MEDIA
Assuming the 90 days trading horizon Iberdrola SA is expected to generate 0.48 times more return on investment than TOWNSQUARE MEDIA. However, Iberdrola SA is 2.1 times less risky than TOWNSQUARE MEDIA. It trades about 0.06 of its potential returns per unit of risk. TOWNSQUARE MEDIA INC is currently generating about -0.06 per unit of risk. If you would invest 1,354 in Iberdrola SA on November 4, 2024 and sell it today you would earn a total of 17.00 from holding Iberdrola SA or generate 1.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iberdrola SA vs. TOWNSQUARE MEDIA INC
Performance |
| Timeline |
| Iberdrola SA |
| TOWNSQUARE MEDIA INC |
Iberdrola and TOWNSQUARE MEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iberdrola and TOWNSQUARE MEDIA
The main advantage of trading using opposite Iberdrola and TOWNSQUARE MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iberdrola 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.| Iberdrola vs. China Resources Beer | Iberdrola vs. BOSTON BEER A | Iberdrola vs. UNITED UTILITIES GR | Iberdrola vs. SLR Investment Corp |
| TOWNSQUARE MEDIA vs. HOCHSCHILD MINING | TOWNSQUARE MEDIA vs. ecotel communication ag | TOWNSQUARE MEDIA vs. Verizon Communications | TOWNSQUARE MEDIA vs. COMBA TELECOM SYST |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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