Correlation Between CI Synergy and TD Index

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

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

Diversification Opportunities for CI Synergy and TD Index

0.97

Correlation Coefficient

CI Synergy  TD Index

Almost no diversification

The 3 months correlation between 0P000075Q1 and 0P000071W8 is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding CI Synergy American and TD Index Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TD Index Fund and CI Synergy 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 CI Synergy American are associated (or correlated) with TD Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TD Index Fund has no effect on the direction of CI Synergy i.e., CI Synergy and TD Index go up and down completely randomly.

Pair Corralation between CI Synergy and TD Index

Assuming the 90 days trading horizon CI Synergy American is expected to generate 1.11 times more return on investment than TD Index. However, CI Synergy is 1.11 times more volatile than TD Index Fund. It trades about 0.15 of its potential returns per unit of risk. TD Index Fund is currently generating about 0.14 per unit of risk. If you would invest  3,032  in CI Synergy American on October 11, 2024 and sell it today you would earn a total of  1,197  from holding CI Synergy American or generate 39.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	58.18%
Values	Daily Returns

CI Synergy American  vs.  TD Index Fund

CI Synergy American

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CI Synergy American are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, CI Synergy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

TD Index Fund

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TD Index Fund are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, TD Index is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with CI Synergy and TD Index

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

The idea behind CI Synergy American and TD Index Fund 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.