Correlation Between Trade Desk and OAKTRSPECLENDNEW

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

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

Diversification Opportunities for Trade Desk and OAKTRSPECLENDNEW

0.66

Correlation Coefficient

Trade Desk  OAKTRSPECLENDNEW

Poor diversification

The 3 months correlation between Trade and OAKTRSPECLENDNEW is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding The Trade Desk and OAKTRSPECLENDNEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OAKTRSPECLENDNEW and Trade Desk 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 The Trade Desk are associated (or correlated) with OAKTRSPECLENDNEW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OAKTRSPECLENDNEW has no effect on the direction of Trade Desk i.e., Trade Desk and OAKTRSPECLENDNEW go up and down completely randomly.

Pair Corralation between Trade Desk and OAKTRSPECLENDNEW

Assuming the 90 days trading horizon The Trade Desk is expected to generate 2.41 times more return on investment than OAKTRSPECLENDNEW. However, Trade Desk is 2.41 times more volatile than OAKTRSPECLENDNEW. It trades about 0.07 of its potential returns per unit of risk. OAKTRSPECLENDNEW is currently generating about 0.15 per unit of risk. If you would invest  12,014  in The Trade Desk on September 12, 2024 and sell it today you would earn a total of  444.00  from holding The Trade Desk or generate 3.7% return on investment over 90 days.

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

The Trade Desk  vs.  OAKTRSPECLENDNEW

Trade Desk

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Trade Desk are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Trade Desk unveiled solid returns over the last few months and may actually be approaching a breakup point.

OAKTRSPECLENDNEW

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in OAKTRSPECLENDNEW are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, OAKTRSPECLENDNEW may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Trade Desk and OAKTRSPECLENDNEW

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

The idea behind The Trade Desk and OAKTRSPECLENDNEW 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.