Correlation Between BetaPro SP and TD Active
Can any of the company-specific risk be diversified away by investing in both BetaPro SP 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 SP 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 SP 500 and TD Active High, you can compare the effects of market volatilities on BetaPro SP 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 SP with a short position of TD Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro SP and TD Active.
Diversification Opportunities for BetaPro SP and TD Active
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BetaPro and TUHY is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro SP 500 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 SP 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 SP 500 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 SP i.e., BetaPro SP and TD Active go up and down completely randomly.
Pair Corralation between BetaPro SP and TD Active
Assuming the 90 days trading horizon BetaPro SP 500 is expected to under-perform the TD Active. But the etf apears to be less risky and, when comparing its historical volatility, BetaPro SP 500 is 4.78 times less risky than TD Active. The etf trades about -0.08 of its potential returns per unit of risk. The TD Active High is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,048 in TD Active High on October 9, 2024 and sell it today you would earn a total of 34.00 from holding TD Active High or generate 1.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.56% |
| Values | Daily Returns |
BetaPro SP 500 vs. TD Active High
Performance |
| Timeline |
| BetaPro SP 500 |
| TD Active High |
BetaPro SP and TD Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro SP and TD Active
The main advantage of trading using opposite BetaPro SP and TD Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro SP 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 SP vs. BetaPro SPTSX 60 | BetaPro SP vs. BetaPro SP 500 | BetaPro SP vs. BetaPro SP TSX | BetaPro SP 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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