Correlation Between Beijing MediaLimited and Trade Desk
Can any of the company-specific risk be diversified away by investing in both Beijing MediaLimited and Trade Desk 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 Beijing MediaLimited and Trade Desk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beijing Media and The Trade Desk, you can compare the effects of market volatilities on Beijing MediaLimited and Trade Desk 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 Beijing MediaLimited with a short position of Trade Desk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing MediaLimited and Trade Desk.
Diversification Opportunities for Beijing MediaLimited and Trade Desk
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Beijing and Trade is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Media and The Trade Desk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trade Desk and Beijing MediaLimited 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 Beijing Media are associated (or correlated) with Trade Desk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trade Desk has no effect on the direction of Beijing MediaLimited i.e., Beijing MediaLimited and Trade Desk go up and down completely randomly.
Pair Corralation between Beijing MediaLimited and Trade Desk
Assuming the 90 days horizon Beijing Media is expected to under-perform the Trade Desk. In addition to that, Beijing MediaLimited is 1.26 times more volatile than The Trade Desk. It trades about 0.0 of its total potential returns per unit of risk. The Trade Desk is currently generating about 0.15 per unit of volatility. If you would invest 9,409 in The Trade Desk on September 2, 2024 and sell it today you would earn a total of 2,691 from holding The Trade Desk or generate 28.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Media vs. The Trade Desk
Performance |
| Timeline |
| Beijing MediaLimited |
| Trade Desk |
Beijing MediaLimited and Trade Desk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing MediaLimited and Trade Desk
The main advantage of trading using opposite Beijing MediaLimited and Trade Desk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing MediaLimited position performs unexpectedly, Trade Desk 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 Trade Desk will offset losses from the drop in Trade Desk's long position.| Beijing MediaLimited vs. Haverty Furniture Companies | Beijing MediaLimited vs. MI Homes | Beijing MediaLimited vs. Addus HomeCare | Beijing MediaLimited vs. MHP Hotel AG |
| Trade Desk vs. Playtech plc | Trade Desk vs. Wyndham Hotels Resorts | Trade Desk vs. Beijing Media | Trade Desk vs. PARKEN Sport Entertainment |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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