Correlation Between NH HOTEL and Townsquare Media
Can any of the company-specific risk be diversified away by investing in both NH HOTEL 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 NH HOTEL and Townsquare Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NH HOTEL GROUP and Townsquare Media, you can compare the effects of market volatilities on NH HOTEL 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 NH HOTEL with a short position of Townsquare Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH HOTEL and Townsquare Media.
Diversification Opportunities for NH HOTEL and Townsquare Media
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NH5 and Townsquare is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding NH HOTEL GROUP and Townsquare Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Townsquare Media and NH HOTEL 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 NH HOTEL 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 has no effect on the direction of NH HOTEL i.e., NH HOTEL and Townsquare Media go up and down completely randomly.
Pair Corralation between NH HOTEL and Townsquare Media
Assuming the 90 days trading horizon NH HOTEL GROUP is expected to generate 2.67 times more return on investment than Townsquare Media. However, NH HOTEL is 2.67 times more volatile than Townsquare Media. It trades about 0.28 of its potential returns per unit of risk. Townsquare Media is currently generating about 0.0 per unit of risk. If you would invest 443.00 in NH HOTEL GROUP on October 12, 2024 and sell it today you would earn a total of 179.00 from holding NH HOTEL GROUP or generate 40.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NH HOTEL GROUP vs. Townsquare Media
Performance |
| Timeline |
| NH HOTEL GROUP |
| Townsquare Media |
NH HOTEL and Townsquare Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH HOTEL and Townsquare Media
The main advantage of trading using opposite NH HOTEL and Townsquare Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH HOTEL 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 NH HOTEL GROUP and Townsquare Media 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. PACIFIC ONLINE | Townsquare Media vs. NH HOTEL GROUP | Townsquare Media vs. HYATT HOTELS A | Townsquare Media vs. DALATA HOTEL |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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