Correlation Between IShares Core and TD Canadian
Can any of the company-specific risk be diversified away by investing in both IShares Core and TD Canadian 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 IShares Core and TD Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core SPTSX and TD Canadian Aggregate, you can compare the effects of market volatilities on IShares Core and TD Canadian 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 IShares Core with a short position of TD Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and TD Canadian.
Diversification Opportunities for IShares Core and TD Canadian
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and TDB is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SPTSX and TD Canadian Aggregate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TD Canadian Aggregate and IShares Core 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 iShares Core SPTSX are associated (or correlated) with TD Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TD Canadian Aggregate has no effect on the direction of IShares Core i.e., IShares Core and TD Canadian go up and down completely randomly.
Pair Corralation between IShares Core and TD Canadian
Assuming the 90 days trading horizon iShares Core SPTSX is expected to generate 1.02 times more return on investment than TD Canadian. However, IShares Core is 1.02 times more volatile than TD Canadian Aggregate. It trades about 0.65 of its potential returns per unit of risk. TD Canadian Aggregate is currently generating about 0.16 per unit of risk. If you would invest 3,853 in iShares Core SPTSX on September 1, 2024 and sell it today you would earn a total of 246.00 from holding iShares Core SPTSX or generate 6.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
iShares Core SPTSX vs. TD Canadian Aggregate
Performance |
| Timeline |
| iShares Core SPTSX |
| TD Canadian Aggregate |
IShares Core and TD Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and TD Canadian
The main advantage of trading using opposite IShares Core and TD Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, TD Canadian 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 Canadian will offset losses from the drop in TD Canadian's long position.| IShares Core vs. iShares SPTSX 60 | IShares Core vs. iShares Core SP | IShares Core vs. iShares SPTSX Composite | IShares Core vs. iShares Core MSCI |
| TD Canadian vs. BetaPro Gold Bullion | TD Canadian vs. BetaPro SP TSX | TD Canadian vs. BetaPro SPTSX Capped | TD Canadian vs. Global X Active |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |