Correlation Between Trade Desk and National Retail

Can any of the company-specific risk be diversified away by investing in both Trade Desk and National Retail 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 National Retail 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 National Retail Properties, you can compare the effects of market volatilities on Trade Desk and National Retail 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 National Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trade Desk and National Retail.

Diversification Opportunities for Trade Desk and National Retail

-0.64

Correlation Coefficient

Trade Desk  National Retail

Excellent diversification

The 3 months correlation between Trade and National is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding The Trade Desk and National Retail Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Retail Prop 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 National Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Retail Prop has no effect on the direction of Trade Desk i.e., Trade Desk and National Retail go up and down completely randomly.

Pair Corralation between Trade Desk and National Retail

Assuming the 90 days trading horizon The Trade Desk is expected to under-perform the National Retail. In addition to that, Trade Desk is 3.86 times more volatile than National Retail Properties. It trades about -0.21 of its total potential returns per unit of risk. National Retail Properties is currently generating about 0.01 per unit of volatility. If you would invest  3,802  in National Retail Properties on December 28, 2024 and sell it today you would earn a total of  24.00  from holding National Retail Properties or generate 0.63% return on investment over 90 days.

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

The Trade Desk  vs.  National Retail Properties

Trade Desk

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Trade Desk has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

National Retail Prop

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in National Retail Properties are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, National Retail is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Trade Desk and National Retail

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

The idea behind The Trade Desk and National Retail Properties 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.