Correlation Between Toronto Dominion and Sun Life
Can any of the company-specific risk be diversified away by investing in both Toronto Dominion and Sun Life 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 Sun Life 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 Sun Life Non, you can compare the effects of market volatilities on Toronto Dominion and Sun Life 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 Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Toronto Dominion and Sun Life.
Diversification Opportunities for Toronto Dominion and Sun Life
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Toronto and Sun is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Toronto Dominion Bank and Sun Life Non in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Life Non 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 Sun Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Life Non has no effect on the direction of Toronto Dominion i.e., Toronto Dominion and Sun Life go up and down completely randomly.
Pair Corralation between Toronto Dominion and Sun Life
Assuming the 90 days trading horizon Toronto Dominion Bank is expected to generate 0.9 times more return on investment than Sun Life. However, Toronto Dominion Bank is 1.12 times less risky than Sun Life. It trades about 0.08 of its potential returns per unit of risk. Sun Life Non is currently generating about 0.07 per unit of risk. If you would invest 1,761 in Toronto Dominion Bank on November 27, 2024 and sell it today you would earn a total of 709.00 from holding Toronto Dominion Bank or generate 40.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Toronto Dominion Bank vs. Sun Life Non
Performance |
| Timeline |
| Toronto Dominion Bank |
| Sun Life Non |
Toronto Dominion and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Toronto Dominion and Sun Life
The main advantage of trading using opposite Toronto Dominion and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Toronto Dominion position performs unexpectedly, Sun Life 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 Sun Life will offset losses from the drop in Sun Life's long position.| Toronto Dominion vs. Algonquin Power Utilities | Toronto Dominion vs. Brookfield Asset Management | Toronto Dominion vs. Flow Beverage Corp | Toronto Dominion vs. Verizon Communications CDR |
| Sun Life vs. Maple Peak Investments | Sun Life vs. Wilmington Capital Management | Sun Life vs. Intact Financial Corp | Sun Life vs. CNJ Capital Investments |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |