Correlation Between Teladoc Health and Trade Desk

Can any of the company-specific risk be diversified away by investing in both Teladoc Health and Trade Desk 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 Teladoc Health and Trade Desk into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Teladoc Health and The Trade Desk, you can compare the effects of market volatilities on Teladoc Health and Trade Desk 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 Teladoc Health with a short position of Trade Desk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teladoc Health and Trade Desk.

Diversification Opportunities for Teladoc Health and Trade Desk

0.85

Correlation Coefficient

Teladoc Health  Trade Desk

Very poor diversification

The 3 months correlation between Teladoc and Trade is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Teladoc Health and The Trade Desk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trade Desk and Teladoc Health 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 Teladoc Health are associated (or correlated) with Trade Desk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trade Desk has no effect on the direction of Teladoc Health i.e., Teladoc Health and Trade Desk go up and down completely randomly.

Pair Corralation between Teladoc Health and Trade Desk

Assuming the 90 days trading horizon Teladoc Health is expected to generate 1.95 times more return on investment than Trade Desk. However, Teladoc Health is 1.95 times more volatile than The Trade Desk. It trades about 0.09 of its potential returns per unit of risk. The Trade Desk is currently generating about 0.15 per unit of risk. If you would invest  158.00  in Teladoc Health on October 7, 2024 and sell it today you would earn a total of  35.00  from holding Teladoc Health or generate 22.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Teladoc Health  vs.  The Trade Desk

Teladoc Health

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Teladoc Health are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental indicators, Teladoc Health sustained solid returns over the last few months and may actually be approaching a breakup point.

Trade Desk

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Trade Desk are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Trade Desk sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Teladoc Health and Trade Desk

The main advantage of trading using opposite Teladoc Health and Trade Desk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teladoc Health position performs unexpectedly, Trade Desk 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 Trade Desk will offset losses from the drop in Trade Desk's long position.

The idea behind Teladoc Health and The Trade Desk 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.

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..