Correlation Between Edgepoint Global and TD Comfort

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

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

Diversification Opportunities for Edgepoint Global and TD Comfort

0.86

Correlation Coefficient

Edgepoint Global  TD Comfort

Very poor diversification

The 3 months correlation between Edgepoint and 0P0001FAU5 is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Edgepoint Global Portfolio and TD Comfort Aggressive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TD Comfort Aggressive and Edgepoint Global 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 Edgepoint Global Portfolio are associated (or correlated) with TD Comfort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TD Comfort Aggressive has no effect on the direction of Edgepoint Global i.e., Edgepoint Global and TD Comfort go up and down completely randomly.

Pair Corralation between Edgepoint Global and TD Comfort

Assuming the 90 days trading horizon Edgepoint Global is expected to generate 1.26 times less return on investment than TD Comfort. In addition to that, Edgepoint Global is 1.24 times more volatile than TD Comfort Aggressive. It trades about 0.15 of its total potential returns per unit of risk. TD Comfort Aggressive is currently generating about 0.24 per unit of volatility. If you would invest  1,635  in TD Comfort Aggressive on August 31, 2024 and sell it today you would earn a total of  129.00  from holding TD Comfort Aggressive or generate 7.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Edgepoint Global Portfolio  vs.  TD Comfort Aggressive

Edgepoint Global Por

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Edgepoint Global Portfolio are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. Despite fairly strong forward indicators, Edgepoint Global is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

TD Comfort Aggressive

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TD Comfort Aggressive are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly inconsistent technical and fundamental indicators, TD Comfort may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Edgepoint Global and TD Comfort

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

The idea behind Edgepoint Global Portfolio and TD Comfort Aggressive 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.