Correlation Between Townsquare Media and Advantage Solutions
Can any of the company-specific risk be diversified away by investing in both Townsquare Media and Advantage Solutions 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 Townsquare Media and Advantage Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Townsquare Media and Advantage Solutions, you can compare the effects of market volatilities on Townsquare Media and Advantage Solutions 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 Townsquare Media with a short position of Advantage Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Townsquare Media and Advantage Solutions.
Diversification Opportunities for Townsquare Media and Advantage Solutions
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Townsquare and Advantage is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Townsquare Media and Advantage Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advantage Solutions and Townsquare Media 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 Townsquare Media are associated (or correlated) with Advantage Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advantage Solutions has no effect on the direction of Townsquare Media i.e., Townsquare Media and Advantage Solutions go up and down completely randomly.
Pair Corralation between Townsquare Media and Advantage Solutions
Considering the 90-day investment horizon Townsquare Media is expected to generate 2.9 times less return on investment than Advantage Solutions. But when comparing it to its historical volatility, Townsquare Media is 2.33 times less risky than Advantage Solutions. It trades about 0.11 of its potential returns per unit of risk. Advantage Solutions is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 323.00 in Advantage Solutions on September 3, 2024 and sell it today you would earn a total of 33.00 from holding Advantage Solutions or generate 10.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Townsquare Media vs. Advantage Solutions
Performance |
| Timeline |
| Townsquare Media |
| Advantage Solutions |
Townsquare Media and Advantage Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Townsquare Media and Advantage Solutions
The main advantage of trading using opposite Townsquare Media and Advantage Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Townsquare Media position performs unexpectedly, Advantage Solutions 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 Advantage Solutions will offset losses from the drop in Advantage Solutions' long position.| Townsquare Media vs. Mirriad Advertising plc | Townsquare Media vs. INEO Tech Corp | Townsquare Media vs. Kidoz Inc | Townsquare Media vs. Marchex |
| Advantage Solutions vs. Criteo Sa | Advantage Solutions vs. Deluxe | Advantage Solutions vs. Emerald Expositions Events | Advantage Solutions vs. Marchex |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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