Correlation Between Safety Insurance and TOWNSQUARE MEDIA
Can any of the company-specific risk be diversified away by investing in both Safety Insurance 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 Safety Insurance and TOWNSQUARE MEDIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safety Insurance Group and TOWNSQUARE MEDIA INC, you can compare the effects of market volatilities on Safety Insurance 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 Safety Insurance with a short position of TOWNSQUARE MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safety Insurance and TOWNSQUARE MEDIA.
Diversification Opportunities for Safety Insurance and TOWNSQUARE MEDIA
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Safety and TOWNSQUARE is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Safety Insurance 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 Safety Insurance 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 Safety Insurance 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 Safety Insurance i.e., Safety Insurance and TOWNSQUARE MEDIA go up and down completely randomly.
Pair Corralation between Safety Insurance and TOWNSQUARE MEDIA
Assuming the 90 days horizon Safety Insurance Group is expected to generate 0.7 times more return on investment than TOWNSQUARE MEDIA. However, Safety Insurance Group is 1.44 times less risky than TOWNSQUARE MEDIA. It trades about 0.05 of its potential returns per unit of risk. TOWNSQUARE MEDIA INC is currently generating about 0.03 per unit of risk. If you would invest 6,448 in Safety Insurance Group on September 14, 2024 and sell it today you would earn a total of 1,402 from holding Safety Insurance Group or generate 21.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.64% |
| Values | Daily Returns |
Safety Insurance Group vs. TOWNSQUARE MEDIA INC
Performance |
| Timeline |
| Safety Insurance |
| TOWNSQUARE MEDIA INC |
Safety Insurance and TOWNSQUARE MEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safety Insurance and TOWNSQUARE MEDIA
The main advantage of trading using opposite Safety Insurance and TOWNSQUARE MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safety Insurance 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.| Safety Insurance vs. Insurance Australia Group | Safety Insurance vs. Superior Plus Corp | Safety Insurance vs. SIVERS SEMICONDUCTORS AB | Safety Insurance vs. CHINA HUARONG ENERHD 50 |
| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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