Correlation Between Trade Desk and Calibre Mining

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

Diversification Opportunities for Trade Desk and Calibre Mining

-0.1

Correlation Coefficient

Trade Desk  Calibre Mining

Good diversification

The 3 months correlation between Trade and Calibre is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding The Trade Desk and Calibre Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calibre Mining Corp 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 Calibre Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calibre Mining Corp has no effect on the direction of Trade Desk i.e., Trade Desk and Calibre Mining go up and down completely randomly.

Pair Corralation between Trade Desk and Calibre Mining

Assuming the 90 days trading horizon The Trade Desk is expected to generate 1.8 times more return on investment than Calibre Mining. However, Trade Desk is 1.8 times more volatile than Calibre Mining Corp. It trades about 0.11 of its potential returns per unit of risk. Calibre Mining Corp is currently generating about 0.05 per unit of risk. If you would invest  11,034  in The Trade Desk on September 1, 2024 and sell it today you would earn a total of  1,066  from holding The Trade Desk or generate 9.66% return on investment over 90 days.

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

The Trade Desk  vs.  Calibre Mining Corp

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. In spite of comparatively uncertain basic indicators, Trade Desk unveiled solid returns over the last few months and may actually be approaching a breakup point.

Calibre Mining Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Calibre Mining Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Calibre Mining may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Trade Desk and Calibre Mining

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

The idea behind The Trade Desk and Calibre Mining Corp 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.