Correlation Between Scisparc and Townsquare Media

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

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

Diversification Opportunities for Scisparc and Townsquare Media

0.51

Correlation Coefficient

Scisparc  Townsquare Media

Very weak diversification

The 3 months correlation between Scisparc and Townsquare is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Scisparc and Townsquare Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Townsquare Media and Scisparc 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 Scisparc 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 Scisparc i.e., Scisparc and Townsquare Media go up and down completely randomly.

Pair Corralation between Scisparc and Townsquare Media

Given the investment horizon of 90 days Scisparc is expected to under-perform the Townsquare Media. In addition to that, Scisparc is 1.54 times more volatile than Townsquare Media. It trades about -0.08 of its total potential returns per unit of risk. Townsquare Media is currently generating about 0.02 per unit of volatility. If you would invest  692.00  in Townsquare Media on May 16, 2025 and sell it today you would earn a total of  10.00  from holding Townsquare Media or generate 1.45% return on investment over 90 days.

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

Scisparc  vs.  Townsquare Media

Scisparc

Risk-Adjusted Performance

Weakest

Over the last 90 days Scisparc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Townsquare Media

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Townsquare Media are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Townsquare Media is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Scisparc and Townsquare Media

The main advantage of trading using opposite Scisparc and Townsquare Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scisparc 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 Scisparc 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.