Correlation Between American Hotel and Toronto Dominion
Can any of the company-specific risk be diversified away by investing in both American Hotel and Toronto Dominion 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 American Hotel and Toronto Dominion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Hotel Income and Toronto Dominion Bank Pref, you can compare the effects of market volatilities on American Hotel and Toronto Dominion 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 American Hotel with a short position of Toronto Dominion. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Hotel and Toronto Dominion.
Diversification Opportunities for American Hotel and Toronto Dominion
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Toronto is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding American Hotel Income and Toronto Dominion Bank Pref in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toronto Dominion Bank and American Hotel 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 American Hotel Income are associated (or correlated) with Toronto Dominion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toronto Dominion Bank has no effect on the direction of American Hotel i.e., American Hotel and Toronto Dominion go up and down completely randomly.
Pair Corralation between American Hotel and Toronto Dominion
Assuming the 90 days trading horizon American Hotel Income is expected to under-perform the Toronto Dominion. In addition to that, American Hotel is 8.77 times more volatile than Toronto Dominion Bank Pref. It trades about -0.1 of its total potential returns per unit of risk. Toronto Dominion Bank Pref is currently generating about -0.01 per unit of volatility. If you would invest 2,582 in Toronto Dominion Bank Pref on December 8, 2024 and sell it today you would lose (3.00) from holding Toronto Dominion Bank Pref or give up 0.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Hotel Income vs. Toronto Dominion Bank Pref
Performance |
| Timeline |
| American Hotel Income |
| Toronto Dominion Bank |
American Hotel and Toronto Dominion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Hotel and Toronto Dominion
The main advantage of trading using opposite American Hotel and Toronto Dominion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Hotel position performs unexpectedly, Toronto Dominion 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 Toronto Dominion will offset losses from the drop in Toronto Dominion's long position.| American Hotel vs. Ramp Metals | ||
| American Hotel vs. Calibre Mining Corp | ||
| American Hotel vs. Dream Industrial Real | ||
| American Hotel vs. Titan Mining Corp |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |