Correlation Between BetaPro Canadian and TD Active
Can any of the company-specific risk be diversified away by investing in both BetaPro Canadian 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 BetaPro Canadian and TD Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaPro Canadian Gold and TD Active High, you can compare the effects of market volatilities on BetaPro Canadian 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 BetaPro Canadian with a short position of TD Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro Canadian and TD Active.
Diversification Opportunities for BetaPro Canadian and TD Active
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BetaPro and TUHY is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro Canadian Gold and TD Active High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TD Active High and BetaPro Canadian 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 BetaPro Canadian Gold 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 High has no effect on the direction of BetaPro Canadian i.e., BetaPro Canadian and TD Active go up and down completely randomly.
Pair Corralation between BetaPro Canadian and TD Active
Assuming the 90 days trading horizon BetaPro Canadian Gold is expected to generate 9.58 times more return on investment than TD Active. However, BetaPro Canadian is 9.58 times more volatile than TD Active High. It trades about 0.04 of its potential returns per unit of risk. TD Active High is currently generating about 0.06 per unit of risk. If you would invest 2,540 in BetaPro Canadian Gold on September 13, 2024 and sell it today you would earn a total of 86.00 from holding BetaPro Canadian Gold or generate 3.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BetaPro Canadian Gold vs. TD Active High
Performance |
| Timeline |
| BetaPro Canadian Gold |
| TD Active High |
BetaPro Canadian and TD Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro Canadian and TD Active
The main advantage of trading using opposite BetaPro Canadian and TD Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro Canadian 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.| BetaPro Canadian vs. BetaPro Gold Bullion | BetaPro Canadian vs. BetaPro NASDAQ 100 2x | BetaPro Canadian vs. BetaPro SP TSX | BetaPro Canadian vs. BetaPro SP TSX |
| TD Active vs. iShares SPTSX 60 | TD Active vs. iShares Core SP | TD Active vs. iShares Core SPTSX | TD Active vs. BMO Aggregate Bond |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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