Correlation Between Trade Desk and Powerschool Holdings

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

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

Diversification Opportunities for Trade Desk and Powerschool Holdings

0.0

Correlation Coefficient

Trade Desk  Powerschool Holdings

Pay attention - limited upside

The 3 months correlation between Trade and Powerschool is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Trade Desk and Powerschool Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powerschool Holdings 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 Powerschool Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powerschool Holdings has no effect on the direction of Trade Desk i.e., Trade Desk and Powerschool Holdings go up and down completely randomly.

Pair Corralation between Trade Desk and Powerschool Holdings

If you would invest  5,646  in Trade Desk on May 7, 2025 and sell it today you would earn a total of  3,330  from holding Trade Desk or generate 58.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Trade Desk  vs.  Powerschool Holdings

Trade Desk

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Trade Desk are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, Trade Desk exhibited solid returns over the last few months and may actually be approaching a breakup point.

Powerschool Holdings

Risk-Adjusted Performance

Weakest

Over the last 90 days Powerschool Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Powerschool Holdings is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Trade Desk and Powerschool Holdings

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

The idea behind Trade Desk and Powerschool Holdings 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.