Correlation Between Global Iman and TD Index

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

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

Diversification Opportunities for Global Iman and TD Index

0.0

Correlation Coefficient

Global Iman  TD Index

Pay attention - limited upside

The 3 months correlation between Global and 0P000071W8 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Global Iman Fund 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 Global Iman 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 Global Iman Fund 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 Global Iman i.e., Global Iman and TD Index go up and down completely randomly.

Pair Corralation between Global Iman and TD Index

If you would invest  13,431  in TD Index Fund on September 13, 2024 and sell it today you would earn a total of  1,773  from holding TD Index Fund or generate 13.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Global Iman Fund  vs.  TD Index Fund

Global Iman Fund

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Global Iman Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy basic indicators, Global Iman is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

TD Index Fund

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TD Index Fund are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat unfluctuating basic indicators, TD Index sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global Iman and TD Index

The main advantage of trading using opposite Global Iman and TD Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Iman 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 Global Iman Fund 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.