Correlation Between Townsquare Media and Dentsu
Can any of the company-specific risk be diversified away by investing in both Townsquare Media and Dentsu 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 Dentsu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Townsquare Media and Dentsu Inc, you can compare the effects of market volatilities on Townsquare Media and Dentsu 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 Dentsu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Townsquare Media and Dentsu.
Diversification Opportunities for Townsquare Media and Dentsu
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Townsquare and Dentsu is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Townsquare Media and Dentsu Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dentsu Inc 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 Dentsu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dentsu Inc has no effect on the direction of Townsquare Media i.e., Townsquare Media and Dentsu go up and down completely randomly.
Pair Corralation between Townsquare Media and Dentsu
Considering the 90-day investment horizon Townsquare Media is expected to generate 0.28 times more return on investment than Dentsu. However, Townsquare Media is 3.59 times less risky than Dentsu. It trades about 0.1 of its potential returns per unit of risk. Dentsu Inc is currently generating about -0.09 per unit of risk. If you would invest 978.00 in Townsquare Media on September 2, 2024 and sell it today you would earn a total of 32.00 from holding Townsquare Media or generate 3.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 19.05% |
| Values | Daily Returns |
Townsquare Media vs. Dentsu Inc
Performance |
| Timeline |
| Townsquare Media |
| Dentsu Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Townsquare Media and Dentsu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Townsquare Media and Dentsu
The main advantage of trading using opposite Townsquare Media and Dentsu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Townsquare Media position performs unexpectedly, Dentsu 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 Dentsu will offset losses from the drop in Dentsu's long position.| Townsquare Media vs. Mirriad Advertising plc | Townsquare Media vs. INEO Tech Corp | Townsquare Media vs. Kidoz Inc | Townsquare Media vs. Marchex |
| Dentsu vs. Beyond Commerce | Dentsu vs. Baosheng Media Group | Dentsu vs. MGO Global Common | Dentsu vs. CMG Holdings Group |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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