Correlation Between Loews Corp and Toronto Dominion
Can any of the company-specific risk be diversified away by investing in both Loews Corp 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 Loews Corp and Toronto Dominion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loews Corp and Toronto Dominion Bank, you can compare the effects of market volatilities on Loews Corp 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 Loews Corp with a short position of Toronto Dominion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loews Corp and Toronto Dominion.
Diversification Opportunities for Loews Corp and Toronto Dominion
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Loews and Toronto is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Loews Corp and Toronto Dominion Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toronto Dominion Bank and Loews Corp 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 Loews Corp 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 Loews Corp i.e., Loews Corp and Toronto Dominion go up and down completely randomly.
Pair Corralation between Loews Corp and Toronto Dominion
Taking into account the 90-day investment horizon Loews Corp is expected to generate 0.91 times more return on investment than Toronto Dominion. However, Loews Corp is 1.1 times less risky than Toronto Dominion. It trades about 0.08 of its potential returns per unit of risk. Toronto Dominion Bank is currently generating about -0.01 per unit of risk. If you would invest 5,730 in Loews Corp on August 23, 2024 and sell it today you would earn a total of 2,719 from holding Loews Corp or generate 47.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loews Corp vs. Toronto Dominion Bank
Performance |
| Timeline |
| Loews Corp |
| Toronto Dominion Bank |
Loews Corp and Toronto Dominion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loews Corp and Toronto Dominion
The main advantage of trading using opposite Loews Corp and Toronto Dominion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loews Corp 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.| Loews Corp vs. Horace Mann Educators | Loews Corp vs. Global Indemnity PLC | Loews Corp vs. Selective Insurance Group | Loews Corp vs. Kemper |
| Toronto Dominion vs. Bank of Montreal | Toronto Dominion vs. Canadian Imperial Bank | Toronto Dominion vs. Bank of Nova | Toronto Dominion vs. JPMorgan Chase Co |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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