Correlation Between BetaPro NASDAQ and TD Active
Can any of the company-specific risk be diversified away by investing in both BetaPro NASDAQ 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 NASDAQ 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 NASDAQ 100 2x and TD Active Global, you can compare the effects of market volatilities on BetaPro NASDAQ 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 NASDAQ with a short position of TD Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro NASDAQ and TD Active.
Diversification Opportunities for BetaPro NASDAQ and TD Active
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BetaPro and TGFI is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro NASDAQ 100 2x 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 BetaPro NASDAQ 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 NASDAQ 100 2x 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 BetaPro NASDAQ i.e., BetaPro NASDAQ and TD Active go up and down completely randomly.
Pair Corralation between BetaPro NASDAQ and TD Active
Assuming the 90 days trading horizon BetaPro NASDAQ 100 2x is expected to generate 6.49 times more return on investment than TD Active. However, BetaPro NASDAQ is 6.49 times more volatile than TD Active Global. It trades about 0.03 of its potential returns per unit of risk. TD Active Global is currently generating about 0.11 per unit of risk. If you would invest 999.00 in BetaPro NASDAQ 100 2x on October 23, 2024 and sell it today you would earn a total of 6.00 from holding BetaPro NASDAQ 100 2x or generate 0.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
BetaPro NASDAQ 100 2x vs. TD Active Global
Performance |
| Timeline |
| BetaPro NASDAQ 100 |
| TD Active Global |
BetaPro NASDAQ and TD Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro NASDAQ and TD Active
The main advantage of trading using opposite BetaPro NASDAQ and TD Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro NASDAQ 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 NASDAQ vs. BetaPro SP 500 | BetaPro NASDAQ vs. BetaPro NASDAQ 100 2x | BetaPro NASDAQ vs. BetaPro SP 500 | BetaPro NASDAQ vs. BetaPro SPTSX 60 |
| TD Active vs. NBI Sustainable Global | TD Active vs. NBI Active Canadian | TD Active vs. NBI Liquid Alternatives | TD Active vs. NBI Global Real |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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