Correlation Between IShares SPTSX and TD Long
Can any of the company-specific risk be diversified away by investing in both IShares SPTSX and TD Long 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 SPTSX and TD Long into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares SPTSX 60 and TD Long Term, you can compare the effects of market volatilities on IShares SPTSX and TD Long 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 SPTSX with a short position of TD Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SPTSX and TD Long.
Diversification Opportunities for IShares SPTSX and TD Long
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IShares and TULB is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding iShares SPTSX 60 and TD Long Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TD Long Term and IShares SPTSX 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 SPTSX 60 are associated (or correlated) with TD Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TD Long Term has no effect on the direction of IShares SPTSX i.e., IShares SPTSX and TD Long go up and down completely randomly.
Pair Corralation between IShares SPTSX and TD Long
Assuming the 90 days trading horizon iShares SPTSX 60 is expected to under-perform the TD Long. But the etf apears to be less risky and, when comparing its historical volatility, iShares SPTSX 60 is 1.13 times less risky than TD Long. The etf trades about -0.04 of its potential returns per unit of risk. The TD Long Term is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 11,324 in TD Long Term on November 27, 2024 and sell it today you would earn a total of 277.00 from holding TD Long Term or generate 2.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
iShares SPTSX 60 vs. TD Long Term
Performance |
| Timeline |
| iShares SPTSX 60 |
| TD Long Term |
IShares SPTSX and TD Long Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SPTSX and TD Long
The main advantage of trading using opposite IShares SPTSX and TD Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SPTSX position performs unexpectedly, TD Long 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 Long will offset losses from the drop in TD Long's long position.| IShares SPTSX vs. iShares Core SP | IShares SPTSX vs. iShares Core SPTSX | IShares SPTSX vs. iShares SPTSX Capped | IShares SPTSX vs. iShares SPTSX Capped |
| TD Long vs. TD Canadian Long | TD Long vs. TD Active Global | TD Long vs. TD Active High | TD Long vs. TD Active Global |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |