Correlation Between Trade Desk and GP Investments
Can any of the company-specific risk be diversified away by investing in both Trade Desk and GP Investments 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 GP Investments 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 GP Investments, you can compare the effects of market volatilities on Trade Desk and GP Investments 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 GP Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trade Desk and GP Investments.
Diversification Opportunities for Trade Desk and GP Investments
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Trade and GPIV33 is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding The Trade Desk and GP Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GP Investments 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 GP Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GP Investments has no effect on the direction of Trade Desk i.e., Trade Desk and GP Investments go up and down completely randomly.
Pair Corralation between Trade Desk and GP Investments
Assuming the 90 days trading horizon The Trade Desk is expected to generate 0.67 times more return on investment than GP Investments. However, The Trade Desk is 1.5 times less risky than GP Investments. It trades about 0.25 of its potential returns per unit of risk. GP Investments is currently generating about -0.17 per unit of risk. 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 |
The Trade Desk vs. GP Investments
Performance |
| Timeline |
| Trade Desk |
| GP Investments |
Trade Desk and GP Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trade Desk and GP Investments
The main advantage of trading using opposite Trade Desk and GP Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trade Desk position performs unexpectedly, GP Investments 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 GP Investments will offset losses from the drop in GP Investments' long position.| Trade Desk vs. Metalurgica Gerdau SA | Trade Desk vs. Ameriprise Financial | Trade Desk vs. TAL Education Group | Trade Desk vs. Mitsubishi UFJ Financial |
| GP Investments vs. Ross Stores | GP Investments vs. Paycom Software | GP Investments vs. MAHLE Metal Leve | GP Investments vs. Bio Techne |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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