Correlation Between Brompton North and TD Active
Can any of the company-specific risk be diversified away by investing in both Brompton North and TD Active 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 Brompton North and TD Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brompton North American and TD Active Global, you can compare the effects of market volatilities on Brompton North and TD Active 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 Brompton North with a short position of TD Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brompton North and TD Active.
Diversification Opportunities for Brompton North and TD Active
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Brompton and TGRE is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Brompton North American and TD Active Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TD Active Global and Brompton North 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 Brompton North American are associated (or correlated) with TD Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TD Active Global has no effect on the direction of Brompton North i.e., Brompton North and TD Active go up and down completely randomly.
Pair Corralation between Brompton North and TD Active
Assuming the 90 days trading horizon Brompton North American is expected to generate 1.34 times more return on investment than TD Active. However, Brompton North is 1.34 times more volatile than TD Active Global. It trades about 0.15 of its potential returns per unit of risk. TD Active Global is currently generating about 0.14 per unit of risk. If you would invest 2,019 in Brompton North American on September 3, 2024 and sell it today you would earn a total of 608.00 from holding Brompton North American or generate 30.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brompton North American vs. TD Active Global
Performance |
| Timeline |
| Brompton North American |
| TD Active Global |
Brompton North and TD Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brompton North and TD Active
The main advantage of trading using opposite Brompton North and TD Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brompton North position performs unexpectedly, TD Active 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 TD Active will offset losses from the drop in TD Active's long position.| Brompton North vs. Brompton Global Dividend | Brompton North vs. Tech Leaders Income | Brompton North vs. Global Healthcare Income | Brompton North vs. Brompton European Dividend |
| TD Active vs. First Asset Energy | TD Active vs. First Asset Tech | TD Active vs. Harvest Equal Weight | TD Active vs. CI Canada Lifeco |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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