Correlation Between Townsquare Media and Clear Channel
Can any of the company-specific risk be diversified away by investing in both Townsquare Media and Clear Channel 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 Clear Channel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Townsquare Media and Clear Channel Outdoor, you can compare the effects of market volatilities on Townsquare Media and Clear Channel 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 Clear Channel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Townsquare Media and Clear Channel.
Diversification Opportunities for Townsquare Media and Clear Channel
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Townsquare and Clear is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Townsquare Media and Clear Channel Outdoor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clear Channel Outdoor 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 Clear Channel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clear Channel Outdoor has no effect on the direction of Townsquare Media i.e., Townsquare Media and Clear Channel go up and down completely randomly.
Pair Corralation between Townsquare Media and Clear Channel
Considering the 90-day investment horizon Townsquare Media is expected to generate 0.53 times more return on investment than Clear Channel. However, Townsquare Media is 1.88 times less risky than Clear Channel. It trades about 0.05 of its potential returns per unit of risk. Clear Channel Outdoor is currently generating about -0.02 per unit of risk. If you would invest 983.00 in Townsquare Media on August 24, 2024 and sell it today you would earn a total of 16.00 from holding Townsquare Media or generate 1.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Townsquare Media vs. Clear Channel Outdoor
Performance |
| Timeline |
| Townsquare Media |
| Clear Channel Outdoor |
Townsquare Media and Clear Channel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Townsquare Media and Clear Channel
The main advantage of trading using opposite Townsquare Media and Clear Channel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Townsquare Media position performs unexpectedly, Clear Channel 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 Clear Channel will offset losses from the drop in Clear Channel's long position.| Townsquare Media vs. Mirriad Advertising plc | Townsquare Media vs. INEO Tech Corp | Townsquare Media vs. Kidoz Inc | Townsquare Media vs. Marchex |
| Clear Channel vs. National CineMedia | Clear Channel vs. Baosheng Media Group | Clear Channel vs. Townsquare Media | Clear Channel vs. Dolphin Entertainment |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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