Correlation Between Computer and Townsquare Media

Can any of the company-specific risk be diversified away by investing in both Computer and Townsquare Media 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 Computer and Townsquare Media into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Computer And Technologies and Townsquare Media, you can compare the effects of market volatilities on Computer and Townsquare Media 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 Computer with a short position of Townsquare Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Computer and Townsquare Media.

Diversification Opportunities for Computer and Townsquare Media

0.69

Correlation Coefficient

Computer  Townsquare Media

Poor diversification

The 3 months correlation between Computer and Townsquare is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Computer And Technologies and Townsquare Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Townsquare Media and Computer 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 Computer And Technologies are associated (or correlated) with Townsquare Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Townsquare Media has no effect on the direction of Computer i.e., Computer and Townsquare Media go up and down completely randomly.

Pair Corralation between Computer and Townsquare Media

Assuming the 90 days horizon Computer is expected to generate 1.23 times less return on investment than Townsquare Media. In addition to that, Computer is 1.73 times more volatile than Townsquare Media. It trades about 0.1 of its total potential returns per unit of risk. Townsquare Media is currently generating about 0.2 per unit of volatility. If you would invest  566.00  in Townsquare Media on April 21, 2025 and sell it today you would earn a total of  184.00  from holding Townsquare Media or generate 32.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Computer And Technologies  vs.  Townsquare Media

Computer And Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Computer And Technologies are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Computer reported solid returns over the last few months and may actually be approaching a breakup point.

Townsquare Media

Risk-Adjusted Performance

Solid

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.

Pair Trading with Computer and Townsquare Media

The main advantage of trading using opposite Computer and Townsquare Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Computer position performs unexpectedly, Townsquare Media 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 Townsquare Media will offset losses from the drop in Townsquare Media's long position.

The idea behind Computer And Technologies and Townsquare Media 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.

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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 Global Correlations module to find global opportunities by holding instruments from different markets.