Correlation Between A2Z Smart and Trade Desk

Can any of the company-specific risk be diversified away by investing in both A2Z Smart 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 A2Z Smart and Trade Desk into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between A2Z Smart Technologies and Trade Desk, you can compare the effects of market volatilities on A2Z Smart 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 A2Z Smart with a short position of Trade Desk. Check out your portfolio center. Please also check ongoing floating volatility patterns of A2Z Smart and Trade Desk.

Diversification Opportunities for A2Z Smart and Trade Desk

0.9

Correlation Coefficient

A2Z Smart  Trade Desk

Almost no diversification

The 3 months correlation between A2Z and Trade is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding A2Z Smart Technologies and Trade Desk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trade Desk and A2Z Smart 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 A2Z Smart Technologies 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 A2Z Smart i.e., A2Z Smart and Trade Desk go up and down completely randomly.

Pair Corralation between A2Z Smart and Trade Desk

Allowing for the 90-day total investment horizon A2Z Smart Technologies is expected to generate 2.37 times more return on investment than Trade Desk. However, A2Z Smart is 2.37 times more volatile than Trade Desk. It trades about 0.27 of its potential returns per unit of risk. Trade Desk is currently generating about 0.0 per unit of risk. If you would invest  463.00  in A2Z Smart Technologies on August 19, 2024 and sell it today you would earn a total of  186.00  from holding A2Z Smart Technologies or generate 40.17% return on investment over 90 days.

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

A2Z Smart Technologies  vs.  Trade Desk

A2Z Smart Technologies

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in A2Z Smart Technologies are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, A2Z Smart showed solid returns over the last few months and may actually be approaching a breakup point.

Trade Desk

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Trade Desk are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Trade Desk exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with A2Z Smart and Trade Desk

The main advantage of trading using opposite A2Z Smart and Trade Desk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if A2Z Smart 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 A2Z Smart Technologies and 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.