Correlation Between Townsquare Media and Contextlogic

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Can any of the company-specific risk be diversified away by investing in both Townsquare Media and Contextlogic 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 Contextlogic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Townsquare Media and Contextlogic, you can compare the effects of market volatilities on Townsquare Media and Contextlogic 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 Contextlogic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Townsquare Media and Contextlogic.

Diversification Opportunities for Townsquare Media and Contextlogic

TownsquareContextlogicDiversified AwayTownsquareContextlogicDiversified Away100%
-0.04
  Correlation Coefficient

Good diversification

The 3 months correlation between Townsquare and Contextlogic is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Townsquare Media and Contextlogic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contextlogic 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 Contextlogic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contextlogic has no effect on the direction of Townsquare Media i.e., Townsquare Media and Contextlogic go up and down completely randomly.

Pair Corralation between Townsquare Media and Contextlogic

Considering the 90-day investment horizon Townsquare Media is expected to under-perform the Contextlogic. But the stock apears to be less risky and, when comparing its historical volatility, Townsquare Media is 1.4 times less risky than Contextlogic. The stock trades about -0.15 of its potential returns per unit of risk. The Contextlogic is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  707.00  in Contextlogic on November 25, 2024 and sell it today you would earn a total of  47.00  from holding Contextlogic or generate 6.65% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Townsquare Media  vs.  Contextlogic

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -100102030
JavaScript chart by amCharts 3.21.15TSQ LOGC
       Timeline  
Townsquare Media 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Townsquare Media has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb8.599.510
Contextlogic 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Contextlogic are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Contextlogic may actually be approaching a critical reversion point that can send shares even higher in March 2025.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb6.577.58

Townsquare Media and Contextlogic Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.29-2.47-1.64-0.810.01260.751.512.263.02 0.050.060.070.080.090.10
JavaScript chart by amCharts 3.21.15TSQ LOGC
       Returns  

Pair Trading with Townsquare Media and Contextlogic

The main advantage of trading using opposite Townsquare Media and Contextlogic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Townsquare Media position performs unexpectedly, Contextlogic 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 Contextlogic will offset losses from the drop in Contextlogic's long position.
The idea behind Townsquare Media and Contextlogic pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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