Correlation Between BetaPro SPTSX and TD Canadian
Can any of the company-specific risk be diversified away by investing in both BetaPro SPTSX and TD Canadian 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 SPTSX and TD Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaPro SPTSX 60 and TD Canadian Aggregate, you can compare the effects of market volatilities on BetaPro SPTSX and TD Canadian 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 SPTSX with a short position of TD Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro SPTSX and TD Canadian.
Diversification Opportunities for BetaPro SPTSX and TD Canadian
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BetaPro and TDB is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro SPTSX 60 and TD Canadian Aggregate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TD Canadian Aggregate and BetaPro SPTSX 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 SPTSX 60 are associated (or correlated) with TD Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TD Canadian Aggregate has no effect on the direction of BetaPro SPTSX i.e., BetaPro SPTSX and TD Canadian go up and down completely randomly.
Pair Corralation between BetaPro SPTSX and TD Canadian
Assuming the 90 days trading horizon BetaPro SPTSX 60 is expected to under-perform the TD Canadian. In addition to that, BetaPro SPTSX is 3.4 times more volatile than TD Canadian Aggregate. It trades about -0.12 of its total potential returns per unit of risk. TD Canadian Aggregate is currently generating about 0.06 per unit of volatility. If you would invest 1,305 in TD Canadian Aggregate on October 24, 2024 and sell it today you would earn a total of 5.00 from holding TD Canadian Aggregate or generate 0.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BetaPro SPTSX 60 vs. TD Canadian Aggregate
Performance |
| Timeline |
| BetaPro SPTSX 60 |
| TD Canadian Aggregate |
BetaPro SPTSX and TD Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BetaPro SPTSX and TD Canadian
The main advantage of trading using opposite BetaPro SPTSX and TD Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro SPTSX position performs unexpectedly, TD Canadian 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 Canadian will offset losses from the drop in TD Canadian's long position.| BetaPro SPTSX vs. BetaPro Gold Bullion | BetaPro SPTSX vs. BetaPro NASDAQ 100 2x | BetaPro SPTSX vs. BetaPro SP TSX | BetaPro SPTSX vs. BetaPro SP TSX |
| TD Canadian vs. TD International Equity | TD Canadian vs. TD Canadian Equity | TD Canadian vs. TD Equity Index | TD Canadian vs. TD Equity CAD |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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