Correlation Between Townsquare Media and Snipp Interactive

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

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

Diversification Opportunities for Townsquare Media and Snipp Interactive

0.73

Correlation Coefficient

Townsquare Media  Snipp Interactive

Poor diversification

The 3 months correlation between Townsquare and Snipp is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Townsquare Media and Snipp Interactive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snipp Interactive 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 Snipp Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Snipp Interactive has no effect on the direction of Townsquare Media i.e., Townsquare Media and Snipp Interactive go up and down completely randomly.

Pair Corralation between Townsquare Media and Snipp Interactive

Considering the 90-day investment horizon Townsquare Media is expected to generate 0.44 times more return on investment than Snipp Interactive. However, Townsquare Media is 2.27 times less risky than Snipp Interactive. It trades about -0.05 of its potential returns per unit of risk. Snipp Interactive is currently generating about -0.07 per unit of risk. If you would invest  1,197  in Townsquare Media on July 9, 2024 and sell it today you would lose (163.00) from holding Townsquare Media or give up 13.62% of portfolio value over 90 days.

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

Townsquare Media  vs.  Snipp Interactive

Townsquare Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Townsquare Media has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Townsquare Media is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Snipp Interactive

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Snipp Interactive has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Townsquare Media and Snipp Interactive

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

The idea behind Townsquare Media and Snipp Interactive 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.