Correlation Between Trade Desk and Caseys General
Can any of the company-specific risk be diversified away by investing in both Trade Desk and Caseys General 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 Caseys General 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 Caseys General Stores, you can compare the effects of market volatilities on Trade Desk and Caseys General 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 Caseys General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trade Desk and Caseys General.
Diversification Opportunities for Trade Desk and Caseys General
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Trade and Caseys is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding The Trade Desk and Caseys General Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Caseys General Stores 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 Caseys General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Caseys General Stores has no effect on the direction of Trade Desk i.e., Trade Desk and Caseys General go up and down completely randomly.
Pair Corralation between Trade Desk and Caseys General
Assuming the 90 days trading horizon The Trade Desk is expected to under-perform the Caseys General. In addition to that, Trade Desk is 1.82 times more volatile than Caseys General Stores. It trades about -0.21 of its total potential returns per unit of risk. Caseys General Stores is currently generating about -0.23 per unit of volatility. If you would invest 39,800 in Caseys General Stores on October 19, 2024 and sell it today you would lose (1,800) from holding Caseys General Stores or give up 4.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Trade Desk vs. Caseys General Stores
Performance |
| Timeline |
| Trade Desk |
| Caseys General Stores |
Trade Desk and Caseys General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trade Desk and Caseys General
The main advantage of trading using opposite Trade Desk and Caseys General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trade Desk position performs unexpectedly, Caseys General 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 Caseys General will offset losses from the drop in Caseys General's long position.| Trade Desk vs. CITY OFFICE REIT | Trade Desk vs. Corporate Office Properties | Trade Desk vs. KENEDIX OFFICE INV | Trade Desk vs. Tyson Foods |
| Caseys General vs. The Trade Desk | Caseys General vs. NTG Nordic Transport | Caseys General vs. CARSALESCOM | Caseys General vs. BII Railway Transportation |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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