Correlation Between TD Index and Edgepoint Cdn

Can any of the company-specific risk be diversified away by investing in both TD Index and Edgepoint Cdn 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 Index and Edgepoint Cdn into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TD Index Fund and Edgepoint Cdn Growth, you can compare the effects of market volatilities on TD Index and Edgepoint Cdn 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 Index with a short position of Edgepoint Cdn. Check out your portfolio center. Please also check ongoing floating volatility patterns of TD Index and Edgepoint Cdn.

Diversification Opportunities for TD Index and Edgepoint Cdn

0.92

Correlation Coefficient

TD Index  Edgepoint Cdn

Almost no diversification

The 3 months correlation between 0P000071W8 and Edgepoint is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding TD Index Fund and Edgepoint Cdn Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgepoint Cdn Growth and TD Index 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 Index Fund are associated (or correlated) with Edgepoint Cdn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgepoint Cdn Growth has no effect on the direction of TD Index i.e., TD Index and Edgepoint Cdn go up and down completely randomly.

Pair Corralation between TD Index and Edgepoint Cdn

Assuming the 90 days trading horizon TD Index Fund is expected to generate 1.73 times more return on investment than Edgepoint Cdn. However, TD Index is 1.73 times more volatile than Edgepoint Cdn Growth. It trades about 0.2 of its potential returns per unit of risk. Edgepoint Cdn Growth is currently generating about 0.09 per unit of risk. If you would invest  13,564  in TD Index Fund on September 25, 2024 and sell it today you would earn a total of  1,397  from holding TD Index Fund or generate 10.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.41%
Values	Daily Returns

TD Index Fund  vs.  Edgepoint Cdn Growth

TD Index Fund

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TD Index Fund are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat unfluctuating basic indicators, TD Index may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Edgepoint Cdn Growth

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Edgepoint Cdn Growth are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively steady forward-looking indicators, Edgepoint Cdn is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with TD Index and Edgepoint Cdn

The main advantage of trading using opposite TD Index and Edgepoint Cdn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TD Index position performs unexpectedly, Edgepoint Cdn 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 Edgepoint Cdn will offset losses from the drop in Edgepoint Cdn's long position.

The idea behind TD Index Fund and Edgepoint Cdn Growth pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.