Correlation Between Townsquare Media and Caseys General

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

Diversification Opportunities for Townsquare Media and Caseys General

0.62
  Correlation Coefficient

Poor diversification

The 3 months correlation between Townsquare and Caseys is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Townsquare Media and Caseys General Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caseys General Stores 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 Caseys General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caseys General Stores has no effect on the direction of Townsquare Media i.e., Townsquare Media and Caseys General go up and down completely randomly.

Pair Corralation between Townsquare Media and Caseys General

Assuming the 90 days horizon Townsquare Media is expected to generate 1.74 times less return on investment than Caseys General. In addition to that, Townsquare Media is 1.14 times more volatile than Caseys General Stores. It trades about 0.04 of its total potential returns per unit of risk. Caseys General Stores is currently generating about 0.08 per unit of volatility. If you would invest  37,359  in Caseys General Stores on April 21, 2025 and sell it today you would earn a total of  6,041  from holding Caseys General Stores or generate 16.17% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Townsquare Media  vs.  Caseys General Stores

 Performance 
       Timeline  
Townsquare Media 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Townsquare Media are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Townsquare Media reported solid returns over the last few months and may actually be approaching a breakup point.
Caseys General Stores 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Caseys General Stores are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Caseys General unveiled solid returns over the last few months and may actually be approaching a breakup point.

Townsquare Media and Caseys General Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Townsquare Media and Caseys General

The main advantage of trading using opposite Townsquare Media and Caseys General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Townsquare Media position performs unexpectedly, Caseys General 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 Caseys General will offset losses from the drop in Caseys General's long position.
The idea behind Townsquare Media and Caseys General Stores 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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