Correlation Between Trade Desk and Auckland International

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

By analyzing existing cross correlation between Trade Desk and Auckland International Airport, you can compare the effects of market volatilities on Trade Desk and Auckland International 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 Auckland International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trade Desk and Auckland International.

Diversification Opportunities for Trade Desk and Auckland International

0.32

Correlation Coefficient

Trade Desk  Auckland International

Weak diversification

The 3 months correlation between Trade and Auckland is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Trade Desk and Auckland International Airport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auckland International 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 Auckland International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auckland International has no effect on the direction of Trade Desk i.e., Trade Desk and Auckland International go up and down completely randomly.

Pair Corralation between Trade Desk and Auckland International

Considering the 90-day investment horizon Trade Desk is expected to under-perform the Auckland International. In addition to that, Trade Desk is 2.17 times more volatile than Auckland International Airport. It trades about -0.21 of its total potential returns per unit of risk. Auckland International Airport is currently generating about 0.04 per unit of volatility. If you would invest  2,183  in Auckland International Airport on December 29, 2024 and sell it today you would earn a total of  99.00  from holding Auckland International Airport or generate 4.54% return on investment over 90 days.

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

Trade Desk  vs.  Auckland International Airport

Trade Desk

Risk-Adjusted Performance

Very Weak

Over the last 90 days Trade Desk has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Auckland International

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Auckland International Airport are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Auckland International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Trade Desk and Auckland International

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

The idea behind Trade Desk and Auckland International Airport 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.