Correlation Between Toronto Dominion and High Tide
Can any of the company-specific risk be diversified away by investing in both Toronto Dominion and High Tide 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 High Tide 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 High Tide, you can compare the effects of market volatilities on Toronto Dominion and High Tide 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 High Tide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Toronto Dominion and High Tide.
Diversification Opportunities for Toronto Dominion and High Tide
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Toronto and High is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Toronto Dominion Bank and High Tide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Tide 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 High Tide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Tide has no effect on the direction of Toronto Dominion i.e., Toronto Dominion and High Tide go up and down completely randomly.
Pair Corralation between Toronto Dominion and High Tide
Assuming the 90 days horizon Toronto Dominion Bank is expected to under-perform the High Tide. But the stock apears to be less risky and, when comparing its historical volatility, Toronto Dominion Bank is 2.73 times less risky than High Tide. The stock trades about -0.07 of its potential returns per unit of risk. The High Tide is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 371.00 in High Tide on September 13, 2024 and sell it today you would earn a total of 78.00 from holding High Tide or generate 21.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Toronto Dominion Bank vs. High Tide
Performance |
| Timeline |
| Toronto Dominion Bank |
| High Tide |
Toronto Dominion and High Tide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Toronto Dominion and High Tide
The main advantage of trading using opposite Toronto Dominion and High Tide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Toronto Dominion position performs unexpectedly, High Tide 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 High Tide will offset losses from the drop in High Tide's long position.| Toronto Dominion vs. Royal Bank of | Toronto Dominion vs. Bank of Nova | Toronto Dominion vs. Bank of Montreal | Toronto Dominion vs. Canadian Imperial Bank |
| High Tide vs. DelphX Capital Markets | High Tide vs. Citadel Income | High Tide vs. iShares Canadian HYBrid | High Tide vs. Altagas Cum Red |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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