Correlation Between TD Canadian and Global X
Can any of the company-specific risk be diversified away by investing in both TD Canadian and Global X 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 Canadian and Global X into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TD Canadian Equity and Global X SPTSX, you can compare the effects of market volatilities on TD Canadian and Global X 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 Canadian with a short position of Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of TD Canadian and Global X.
Diversification Opportunities for TD Canadian and Global X
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between TTP and Global is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding TD Canadian Equity and Global X SPTSX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X SPTSX and TD Canadian 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 Canadian Equity are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X SPTSX has no effect on the direction of TD Canadian i.e., TD Canadian and Global X go up and down completely randomly.
Pair Corralation between TD Canadian and Global X
Assuming the 90 days trading horizon TD Canadian is expected to generate 1.02 times less return on investment than Global X. In addition to that, TD Canadian is 1.01 times more volatile than Global X SPTSX. It trades about 0.3 of its total potential returns per unit of risk. Global X SPTSX is currently generating about 0.31 per unit of volatility. If you would invest 6,373 in Global X SPTSX on August 28, 2024 and sell it today you would earn a total of 240.00 from holding Global X SPTSX or generate 3.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
TD Canadian Equity vs. Global X SPTSX
Performance |
| Timeline |
| TD Canadian Equity |
| Global X SPTSX |
TD Canadian and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TD Canadian and Global X
The main advantage of trading using opposite TD Canadian and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TD Canadian position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| TD Canadian vs. iShares SPTSX 60 | TD Canadian vs. iShares Core SP | TD Canadian vs. iShares SPTSX Composite | TD Canadian vs. iShares Core MSCI |
| Global X vs. iShares SPTSX 60 | Global X vs. iShares Core SP | Global X vs. iShares SPTSX Composite | Global X vs. iShares Core MSCI |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |