Correlation Between TD Active and TD Active
Can any of the company-specific risk be diversified away by investing in both TD Active and TD Active 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 Active and TD Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TD Active Global and TD Active Enhanced, you can compare the effects of market volatilities on TD Active and TD Active 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 Active with a short position of TD Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of TD Active and TD Active.
Diversification Opportunities for TD Active and TD Active
No risk reduction
The 3 months correlation between TGED and TUED is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding TD Active Global and TD Active Enhanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TD Active Enhanced and TD Active 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 Active Global are associated (or correlated) with TD Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TD Active Enhanced has no effect on the direction of TD Active i.e., TD Active and TD Active go up and down completely randomly.
Pair Corralation between TD Active and TD Active
Assuming the 90 days trading horizon TD Active is expected to generate 1.22 times less return on investment than TD Active. But when comparing it to its historical volatility, TD Active Global is 1.24 times less risky than TD Active. It trades about 0.19 of its potential returns per unit of risk. TD Active Enhanced is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 2,951 in TD Active Enhanced on August 25, 2024 and sell it today you would earn a total of 139.00 from holding TD Active Enhanced or generate 4.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
TD Active Global vs. TD Active Enhanced
Performance |
| Timeline |
| TD Active Global |
| TD Active Enhanced |
TD Active and TD Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TD Active and TD Active
The main advantage of trading using opposite TD Active and TD Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TD Active position performs unexpectedly, TD Active 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 TD Active will offset losses from the drop in TD Active's long position.| TD Active vs. Vanguard FTSE Canada | TD Active vs. Vanguard Canadian Aggregate | TD Active vs. Vanguard Total Market | TD Active vs. Vanguard FTSE Emerging |
| TD Active vs. BMO SP 500 | TD Active vs. Global X SP | TD Active vs. BMO SP 500 | TD Active vs. Vanguard SP 500 |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |