Correlation Between Trade Desk and SKAGEN Global
Can any of the company-specific risk be diversified away by investing in both Trade Desk and SKAGEN Global 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 SKAGEN Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trade Desk and SKAGEN Global A, you can compare the effects of market volatilities on Trade Desk and SKAGEN Global 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 SKAGEN Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trade Desk and SKAGEN Global.
Diversification Opportunities for Trade Desk and SKAGEN Global
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Trade and SKAGEN is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Trade Desk and SKAGEN Global A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SKAGEN Global A 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 SKAGEN Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SKAGEN Global A has no effect on the direction of Trade Desk i.e., Trade Desk and SKAGEN Global go up and down completely randomly.
Pair Corralation between Trade Desk and SKAGEN Global
Considering the 90-day investment horizon Trade Desk is expected to under-perform the SKAGEN Global. In addition to that, Trade Desk is 3.0 times more volatile than SKAGEN Global A. It trades about -0.07 of its total potential returns per unit of risk. SKAGEN Global A is currently generating about -0.2 per unit of volatility. If you would invest 238,650 in SKAGEN Global A on January 20, 2024 and sell it today you would lose (6,050) from holding SKAGEN Global A or give up 2.54% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 90.91% |
Values | Daily Returns |
Trade Desk vs. SKAGEN Global A
Performance |
Timeline |
Trade Desk |
SKAGEN Global A |
Trade Desk and SKAGEN Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Trade Desk and SKAGEN Global
The main advantage of trading using opposite Trade Desk and SKAGEN Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trade Desk position performs unexpectedly, SKAGEN Global 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 SKAGEN Global will offset losses from the drop in SKAGEN Global's long position.Trade Desk vs. Snowflake | Trade Desk vs. Zoom Video Communications | Trade Desk vs. C3 Ai Inc | Trade Desk vs. Salesforce |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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