Correlation Between Trade Desk and Loews Corp
Can any of the company-specific risk be diversified away by investing in both Trade Desk and Loews Corp 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 Loews Corp 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 Loews Corp, you can compare the effects of market volatilities on Trade Desk and Loews Corp 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 Loews Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trade Desk and Loews Corp.
Diversification Opportunities for Trade Desk and Loews Corp
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Trade and Loews is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding The Trade Desk and Loews Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loews Corp 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 Loews Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loews Corp has no effect on the direction of Trade Desk i.e., Trade Desk and Loews Corp go up and down completely randomly.
Pair Corralation between Trade Desk and Loews Corp
Assuming the 90 days trading horizon Trade Desk is expected to generate 1.08 times less return on investment than Loews Corp. In addition to that, Trade Desk is 2.53 times more volatile than Loews Corp. It trades about 0.12 of its total potential returns per unit of risk. Loews Corp is currently generating about 0.34 per unit of volatility. If you would invest 7,244 in Loews Corp on September 3, 2024 and sell it today you would earn a total of 1,006 from holding Loews Corp or generate 13.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Trade Desk vs. Loews Corp
Performance |
| Timeline |
| Trade Desk |
| Loews Corp |
Trade Desk and Loews Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trade Desk and Loews Corp
The main advantage of trading using opposite Trade Desk and Loews Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trade Desk position performs unexpectedly, Loews Corp 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 Loews Corp will offset losses from the drop in Loews Corp's long position.The idea behind The Trade Desk and Loews Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Loews Corp vs. ETFS Coffee ETC | Loews Corp vs. The Trade Desk | Loews Corp vs. Salesforce | Loews Corp vs. WillScot Mobile Mini |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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