Correlation Between TD Active and First Asset
Can any of the company-specific risk be diversified away by investing in both TD Active and First Asset 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 First Asset 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 First Asset Energy, you can compare the effects of market volatilities on TD Active and First Asset 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 First Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of TD Active and First Asset.
Diversification Opportunities for TD Active and First Asset
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TGRE and First is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding TD Active Global and First Asset Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Asset Energy 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 First Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Asset Energy has no effect on the direction of TD Active i.e., TD Active and First Asset go up and down completely randomly.
Pair Corralation between TD Active and First Asset
Assuming the 90 days trading horizon TD Active Global is expected to generate 1.03 times more return on investment than First Asset. However, TD Active is 1.03 times more volatile than First Asset Energy. It trades about 0.31 of its potential returns per unit of risk. First Asset Energy is currently generating about 0.12 per unit of risk. If you would invest 1,526 in TD Active Global on September 3, 2024 and sell it today you would earn a total of 79.00 from holding TD Active Global or generate 5.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TD Active Global vs. First Asset Energy
Performance |
| Timeline |
| TD Active Global |
| First Asset Energy |
TD Active and First Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TD Active and First Asset
The main advantage of trading using opposite TD Active and First Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TD Active position performs unexpectedly, First Asset 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 First Asset will offset losses from the drop in First Asset's long position.| TD Active vs. First Asset Energy | TD Active vs. First Asset Tech | TD Active vs. Harvest Equal Weight | TD Active vs. CI Canada Lifeco |
| First Asset vs. CI Gold Giants | First Asset vs. First Asset Tech | First Asset vs. CI Canada Lifeco | First Asset vs. Harvest Healthcare Leaders |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |