Correlation Between Cogent Communications and TOWNSQUARE MEDIA
Can any of the company-specific risk be diversified away by investing in both Cogent Communications 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 Cogent Communications and TOWNSQUARE MEDIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cogent Communications Holdings and TOWNSQUARE MEDIA INC, you can compare the effects of market volatilities on Cogent Communications 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 Cogent Communications with a short position of TOWNSQUARE MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogent Communications and TOWNSQUARE MEDIA.
Diversification Opportunities for Cogent Communications and TOWNSQUARE MEDIA
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cogent and TOWNSQUARE is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Cogent Communications Holdings 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 Cogent Communications 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 Cogent Communications Holdings 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 Cogent Communications i.e., Cogent Communications and TOWNSQUARE MEDIA go up and down completely randomly.
Pair Corralation between Cogent Communications and TOWNSQUARE MEDIA
Assuming the 90 days trading horizon Cogent Communications Holdings is expected to generate 1.05 times more return on investment than TOWNSQUARE MEDIA. However, Cogent Communications is 1.05 times more volatile than TOWNSQUARE MEDIA INC. It trades about 0.11 of its potential returns per unit of risk. TOWNSQUARE MEDIA INC is currently generating about -0.04 per unit of risk. If you would invest 5,493 in Cogent Communications Holdings on September 3, 2024 and sell it today you would earn a total of 2,207 from holding Cogent Communications Holdings or generate 40.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Cogent Communications Holdings vs. TOWNSQUARE MEDIA INC
Performance |
Timeline |
Cogent Communications |
TOWNSQUARE MEDIA INC |
Cogent Communications and TOWNSQUARE MEDIA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cogent Communications and TOWNSQUARE MEDIA
The main advantage of trading using opposite Cogent Communications and TOWNSQUARE MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogent Communications 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.Cogent Communications vs. T Mobile | Cogent Communications vs. China Mobile Limited | Cogent Communications vs. ATT Inc | Cogent Communications vs. Nippon Telegraph and |
TOWNSQUARE MEDIA vs. TOTAL GABON | TOWNSQUARE MEDIA vs. Walgreens Boots Alliance | TOWNSQUARE MEDIA vs. Peak Resources Limited |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
Money Managers Screen money managers from public funds and ETFs managed around the world | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Commodity Directory Find actively traded commodities issued by global exchanges |