Correlation Between TD Canadian and CI Canadian
Can any of the company-specific risk be diversified away by investing in both TD Canadian and CI 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 TD Canadian and CI Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TD Canadian Long and CI Canadian Convertible, you can compare the effects of market volatilities on TD Canadian and CI 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 TD Canadian with a short position of CI Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of TD Canadian and CI Canadian.
Diversification Opportunities for TD Canadian and CI Canadian
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TCLB and CXF is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding TD Canadian Long and CI Canadian Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Canadian Convertible and TD Canadian 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 TD Canadian Long are associated (or correlated) with CI Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Canadian Convertible has no effect on the direction of TD Canadian i.e., TD Canadian and CI Canadian go up and down completely randomly.
Pair Corralation between TD Canadian and CI Canadian
Assuming the 90 days trading horizon TD Canadian is expected to generate 45.25 times less return on investment than CI Canadian. In addition to that, TD Canadian is 1.16 times more volatile than CI Canadian Convertible. It trades about 0.0 of its total potential returns per unit of risk. CI Canadian Convertible is currently generating about 0.04 per unit of volatility. If you would invest 859.00 in CI Canadian Convertible on August 28, 2024 and sell it today you would earn a total of 152.00 from holding CI Canadian Convertible or generate 17.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
TD Canadian Long vs. CI Canadian Convertible
Performance |
| Timeline |
| TD Canadian Long |
| CI Canadian Convertible |
TD Canadian and CI Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TD Canadian and CI Canadian
The main advantage of trading using opposite TD Canadian and CI Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TD Canadian position performs unexpectedly, CI 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 CI Canadian will offset losses from the drop in CI Canadian's long position.| TD Canadian vs. NBI High Yield | TD Canadian vs. NBI Unconstrained Fixed | TD Canadian vs. Mackenzie Developed ex North | TD Canadian vs. BMO Short Term Bond |
| CI Canadian vs. Franklin Global Aggregate | CI Canadian vs. Franklin Large Cap | CI Canadian vs. First Trust Senior | CI Canadian 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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