Correlation Between Trade Desk and WuXi AppTec
Can any of the company-specific risk be diversified away by investing in both Trade Desk and WuXi AppTec 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 WuXi AppTec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trade Desk and WuXi AppTec Co, you can compare the effects of market volatilities on Trade Desk and WuXi AppTec 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 WuXi AppTec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trade Desk and WuXi AppTec.
Diversification Opportunities for Trade Desk and WuXi AppTec
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Trade and WuXi is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Trade Desk and WuXi AppTec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WuXi AppTec 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 Trade Desk are associated (or correlated) with WuXi AppTec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WuXi AppTec has no effect on the direction of Trade Desk i.e., Trade Desk and WuXi AppTec go up and down completely randomly.
Pair Corralation between Trade Desk and WuXi AppTec
Considering the 90-day investment horizon Trade Desk is expected to generate 0.76 times more return on investment than WuXi AppTec. However, Trade Desk is 1.32 times less risky than WuXi AppTec. It trades about 0.12 of its potential returns per unit of risk. WuXi AppTec Co is currently generating about -0.05 per unit of risk. If you would invest 12,021 in Trade Desk on September 1, 2024 and sell it today you would earn a total of 834.00 from holding Trade Desk or generate 6.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Trade Desk vs. WuXi AppTec Co
Performance |
| Timeline |
| Trade Desk |
| WuXi AppTec |
Trade Desk and WuXi AppTec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trade Desk and WuXi AppTec
The main advantage of trading using opposite Trade Desk and WuXi AppTec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trade Desk position performs unexpectedly, WuXi AppTec 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 WuXi AppTec will offset losses from the drop in WuXi AppTec's long position.| Trade Desk vs. Ke Holdings | Trade Desk vs. nCino Inc | Trade Desk vs. Kingsoft Cloud Holdings | Trade Desk vs. Jfrog |
| WuXi AppTec vs. Neuronetics | WuXi AppTec vs. Intelligent Bio Solutions | WuXi AppTec vs. Biodesix | WuXi AppTec vs. Precipio |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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