Correlation Between Trade Desk and China Eastern
Can any of the company-specific risk be diversified away by investing in both Trade Desk and China Eastern 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 China Eastern 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 China Eastern Airlines, you can compare the effects of market volatilities on Trade Desk and China Eastern 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 China Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trade Desk and China Eastern.
Diversification Opportunities for Trade Desk and China Eastern
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Trade and China is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding The Trade Desk and China Eastern Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Eastern Airlines 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 China Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Eastern Airlines has no effect on the direction of Trade Desk i.e., Trade Desk and China Eastern go up and down completely randomly.
Pair Corralation between Trade Desk and China Eastern
Assuming the 90 days trading horizon The Trade Desk is expected to generate 0.69 times more return on investment than China Eastern. However, The Trade Desk is 1.45 times less risky than China Eastern. It trades about 0.01 of its potential returns per unit of risk. China Eastern Airlines is currently generating about -0.04 per unit of risk. If you would invest 11,456 in The Trade Desk on November 1, 2024 and sell it today you would earn a total of 6.00 from holding The Trade Desk or generate 0.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
The Trade Desk vs. China Eastern Airlines
Performance |
| Timeline |
| Trade Desk |
| China Eastern Airlines |
Trade Desk and China Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trade Desk and China Eastern
The main advantage of trading using opposite Trade Desk and China Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trade Desk position performs unexpectedly, China Eastern 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 China Eastern will offset losses from the drop in China Eastern's long position.| Trade Desk vs. EMBARK EDUCATION LTD | Trade Desk vs. PLAY2CHILL SA ZY | Trade Desk vs. CAREER EDUCATION | Trade Desk vs. Aristocrat Leisure Limited |
| China Eastern vs. Fast Retailing Co | China Eastern vs. Yanzhou Coal Mining | China Eastern vs. The Trade Desk | China Eastern vs. MINCO SILVER |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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