Correlation Between STMicroelectronics and Trade Desk
Can any of the company-specific risk be diversified away by investing in both STMicroelectronics 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 STMicroelectronics and Trade Desk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STMicroelectronics NV and The Trade Desk, you can compare the effects of market volatilities on STMicroelectronics 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 STMicroelectronics with a short position of Trade Desk. Check out your portfolio center. Please also check ongoing floating volatility patterns of STMicroelectronics and Trade Desk.
Diversification Opportunities for STMicroelectronics and Trade Desk
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between STMicroelectronics and Trade is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding STMicroelectronics NV and The Trade Desk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trade Desk and STMicroelectronics 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 STMicroelectronics NV 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 STMicroelectronics i.e., STMicroelectronics and Trade Desk go up and down completely randomly.
Pair Corralation between STMicroelectronics and Trade Desk
Assuming the 90 days trading horizon STMicroelectronics NV is expected to generate 0.15 times more return on investment than Trade Desk. However, STMicroelectronics NV is 6.84 times less risky than Trade Desk. It trades about 0.16 of its potential returns per unit of risk. The Trade Desk is currently generating about -0.05 per unit of risk. If you would invest 15,150 in STMicroelectronics NV on October 26, 2024 and sell it today you would earn a total of 389.00 from holding STMicroelectronics NV or generate 2.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STMicroelectronics NV vs. The Trade Desk
Performance |
| Timeline |
| STMicroelectronics |
| Trade Desk |
STMicroelectronics and Trade Desk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STMicroelectronics and Trade Desk
The main advantage of trading using opposite STMicroelectronics and Trade Desk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STMicroelectronics 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.| STMicroelectronics vs. Clover Health Investments, | STMicroelectronics vs. Nordon Indstrias Metalrgicas | STMicroelectronics vs. PENN Entertainment, | STMicroelectronics vs. GP Investments |
| Trade Desk vs. Electronic Arts | Trade Desk vs. Global X Funds | Trade Desk vs. STMicroelectronics NV | Trade Desk vs. Melco Resorts 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |