Correlation Between Toronto Dominion and MTY Food
Can any of the company-specific risk be diversified away by investing in both Toronto Dominion and MTY Food 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 MTY Food 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 MTY Food Group, you can compare the effects of market volatilities on Toronto Dominion and MTY Food 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 MTY Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Toronto Dominion and MTY Food.
Diversification Opportunities for Toronto Dominion and MTY Food
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Toronto and MTY is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Toronto Dominion Bank and MTY Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTY Food Group 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 MTY Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTY Food Group has no effect on the direction of Toronto Dominion i.e., Toronto Dominion and MTY Food go up and down completely randomly.
Pair Corralation between Toronto Dominion and MTY Food
Assuming the 90 days trading horizon Toronto Dominion is expected to generate 18.76 times less return on investment than MTY Food. But when comparing it to its historical volatility, Toronto Dominion Bank is 2.75 times less risky than MTY Food. It trades about 0.03 of its potential returns per unit of risk. MTY Food Group is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 4,671 in MTY Food Group on October 25, 2024 and sell it today you would earn a total of 300.00 from holding MTY Food Group or generate 6.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 78.95% |
| Values | Daily Returns |
Toronto Dominion Bank vs. MTY Food Group
Performance |
| Timeline |
| Toronto Dominion Bank |
| MTY Food Group |
Toronto Dominion and MTY Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Toronto Dominion and MTY Food
The main advantage of trading using opposite Toronto Dominion and MTY Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Toronto Dominion position performs unexpectedly, MTY Food 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 MTY Food will offset losses from the drop in MTY Food's long position.| Toronto Dominion vs. National Bank of | Toronto Dominion vs. Bank of Nova | Toronto Dominion vs. US Financial 15 | Toronto Dominion vs. Information Services |
| MTY Food vs. Restaurant Brands International | MTY Food vs. Enghouse Systems | MTY Food vs. Metro Inc | MTY Food vs. BRP Inc |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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