Correlation Between Trade Desk and Clean Energy
Can any of the company-specific risk be diversified away by investing in both Trade Desk and Clean Energy 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 Clean Energy 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 Clean Energy Fuels, you can compare the effects of market volatilities on Trade Desk and Clean Energy 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 Clean Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trade Desk and Clean Energy.
Diversification Opportunities for Trade Desk and Clean Energy
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Trade and Clean is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding The Trade Desk and Clean Energy Fuels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clean Energy Fuels 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 Clean Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clean Energy Fuels has no effect on the direction of Trade Desk i.e., Trade Desk and Clean Energy go up and down completely randomly.
Pair Corralation between Trade Desk and Clean Energy
Assuming the 90 days trading horizon The Trade Desk is expected to generate 0.74 times more return on investment than Clean Energy. However, The Trade Desk is 1.34 times less risky than Clean Energy. It trades about 0.07 of its potential returns per unit of risk. Clean Energy Fuels is currently generating about 0.0 per unit of risk. If you would invest 6,832 in The Trade Desk on August 31, 2024 and sell it today you would earn a total of 5,268 from holding The Trade Desk or generate 77.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
The Trade Desk vs. Clean Energy Fuels
Performance |
| Timeline |
| Trade Desk |
| Clean Energy Fuels |
Trade Desk and Clean Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trade Desk and Clean Energy
The main advantage of trading using opposite Trade Desk and Clean Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trade Desk position performs unexpectedly, Clean Energy 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 Clean Energy will offset losses from the drop in Clean Energy's long position.The idea behind The Trade Desk and Clean Energy Fuels 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.| Clean Energy vs. STORE ELECTRONIC | Clean Energy vs. Astral Foods Limited | Clean Energy vs. AUSNUTRIA DAIRY | Clean Energy vs. JJ SNACK FOODS |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |