Correlation Between Toronto Dominion and Excellon Resources
Can any of the company-specific risk be diversified away by investing in both Toronto Dominion and Excellon Resources 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 Toronto Dominion and Excellon Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Toronto Dominion Bank and Excellon Resources, you can compare the effects of market volatilities on Toronto Dominion and Excellon Resources 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 Toronto Dominion with a short position of Excellon Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Toronto Dominion and Excellon Resources.
Diversification Opportunities for Toronto Dominion and Excellon Resources
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Toronto and Excellon is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Toronto Dominion Bank and Excellon Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Excellon Resources and Toronto Dominion 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 Toronto Dominion Bank are associated (or correlated) with Excellon Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Excellon Resources has no effect on the direction of Toronto Dominion i.e., Toronto Dominion and Excellon Resources go up and down completely randomly.
Pair Corralation between Toronto Dominion and Excellon Resources
Assuming the 90 days trading horizon Toronto Dominion Bank is expected to generate 0.1 times more return on investment than Excellon Resources. However, Toronto Dominion Bank is 9.72 times less risky than Excellon Resources. It trades about 0.1 of its potential returns per unit of risk. Excellon Resources is currently generating about 0.01 per unit of risk. If you would invest 1,725 in Toronto Dominion Bank on December 12, 2024 and sell it today you would earn a total of 746.00 from holding Toronto Dominion Bank or generate 43.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Toronto Dominion Bank vs. Excellon Resources
Performance |
| Timeline |
| Toronto Dominion Bank |
| Excellon Resources |
Toronto Dominion and Excellon Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Toronto Dominion and Excellon Resources
The main advantage of trading using opposite Toronto Dominion and Excellon Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Toronto Dominion position performs unexpectedly, Excellon Resources 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 Excellon Resources will offset losses from the drop in Excellon Resources' long position.| Toronto Dominion vs. NeuPath Health | ||
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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