Correlation Between GP Investments and Trade Desk
Can any of the company-specific risk be diversified away by investing in both GP Investments 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 GP Investments and Trade Desk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GP Investments and The Trade Desk, you can compare the effects of market volatilities on GP Investments 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 GP Investments with a short position of Trade Desk. Check out your portfolio center. Please also check ongoing floating volatility patterns of GP Investments and Trade Desk.
Diversification Opportunities for GP Investments and Trade Desk
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GPIV33 and Trade is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding GP Investments and The Trade Desk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trade Desk and GP Investments 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 GP Investments 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 GP Investments i.e., GP Investments and Trade Desk go up and down completely randomly.
Pair Corralation between GP Investments and Trade Desk
Assuming the 90 days trading horizon GP Investments is expected to under-perform the Trade Desk. In addition to that, GP Investments is 1.5 times more volatile than The Trade Desk. It trades about -0.17 of its total potential returns per unit of risk. The Trade Desk is currently generating about 0.25 per unit of volatility. If you would invest 595.00 in The Trade Desk on August 30, 2024 and sell it today you would earn a total of 167.00 from holding The Trade Desk or generate 28.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GP Investments vs. The Trade Desk
Performance |
| Timeline |
| GP Investments |
| Trade Desk |
GP Investments and Trade Desk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GP Investments and Trade Desk
The main advantage of trading using opposite GP Investments and Trade Desk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GP Investments 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.| GP Investments vs. Ross Stores | GP Investments vs. Paycom Software | GP Investments vs. MAHLE Metal Leve | GP Investments vs. Bio Techne |
| Trade Desk vs. Metalurgica Gerdau SA | Trade Desk vs. Ameriprise Financial | Trade Desk vs. TAL Education Group | Trade Desk vs. Mitsubishi UFJ Financial |
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 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.
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