Correlation Between Trade Desk and FirstGroup Plc
Can any of the company-specific risk be diversified away by investing in both Trade Desk and FirstGroup Plc 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 FirstGroup Plc 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 FirstGroup plc, you can compare the effects of market volatilities on Trade Desk and FirstGroup Plc 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 FirstGroup Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trade Desk and FirstGroup Plc.
Diversification Opportunities for Trade Desk and FirstGroup Plc
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Trade and FirstGroup is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding The Trade Desk and FirstGroup plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FirstGroup plc 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 FirstGroup Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FirstGroup plc has no effect on the direction of Trade Desk i.e., Trade Desk and FirstGroup Plc go up and down completely randomly.
Pair Corralation between Trade Desk and FirstGroup Plc
Assuming the 90 days trading horizon The Trade Desk is expected to generate 1.59 times more return on investment than FirstGroup Plc. However, Trade Desk is 1.59 times more volatile than FirstGroup plc. It trades about 0.09 of its potential returns per unit of risk. FirstGroup plc is currently generating about 0.01 per unit of risk. If you would invest 6,487 in The Trade Desk on November 3, 2024 and sell it today you would earn a total of 4,915 from holding The Trade Desk or generate 75.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Trade Desk vs. FirstGroup plc
Performance |
| Timeline |
| Trade Desk |
| FirstGroup plc |
Trade Desk and FirstGroup Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trade Desk and FirstGroup Plc
The main advantage of trading using opposite Trade Desk and FirstGroup Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trade Desk position performs unexpectedly, FirstGroup Plc 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 FirstGroup Plc will offset losses from the drop in FirstGroup Plc's long position.| Trade Desk vs. SIVERS SEMICONDUCTORS AB | Trade Desk vs. NorAm Drilling AS | Trade Desk vs. Volkswagen AG | Trade Desk vs. Darden Restaurants |
| FirstGroup Plc vs. QBE Insurance Group | FirstGroup Plc vs. InPlay Oil Corp | FirstGroup Plc vs. PLAYTECH | FirstGroup Plc vs. Reinsurance Group of |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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