Correlation Between Lendlease and TOWNSQUARE MEDIA
Can any of the company-specific risk be diversified away by investing in both Lendlease 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 Lendlease and TOWNSQUARE MEDIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendlease Group and TOWNSQUARE MEDIA INC, you can compare the effects of market volatilities on Lendlease 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 Lendlease with a short position of TOWNSQUARE MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease and TOWNSQUARE MEDIA.
Diversification Opportunities for Lendlease and TOWNSQUARE MEDIA
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lendlease and TOWNSQUARE is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Group 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 Lendlease 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 Lendlease Group 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 Lendlease i.e., Lendlease and TOWNSQUARE MEDIA go up and down completely randomly.
Pair Corralation between Lendlease and TOWNSQUARE MEDIA
Assuming the 90 days trading horizon Lendlease Group is expected to generate 0.98 times more return on investment than TOWNSQUARE MEDIA. However, Lendlease Group is 1.02 times less risky than TOWNSQUARE MEDIA. It trades about 0.02 of its potential returns per unit of risk. TOWNSQUARE MEDIA INC is currently generating about -0.02 per unit of risk. If you would invest 407.00 in Lendlease Group on September 13, 2024 and sell it today you would earn a total of 2.00 from holding Lendlease Group or generate 0.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lendlease Group vs. TOWNSQUARE MEDIA INC
Performance |
| Timeline |
| Lendlease Group |
| TOWNSQUARE MEDIA INC |
Lendlease and TOWNSQUARE MEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendlease and TOWNSQUARE MEDIA
The main advantage of trading using opposite Lendlease and TOWNSQUARE MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease 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.The idea behind Lendlease Group and TOWNSQUARE MEDIA INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| TOWNSQUARE MEDIA vs. Apple Inc | TOWNSQUARE MEDIA vs. Apple Inc | TOWNSQUARE MEDIA vs. Apple Inc | TOWNSQUARE MEDIA vs. Apple Inc |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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