Correlation Between TD Comfort and Edgepoint Cdn

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Can any of the company-specific risk be diversified away by investing in both TD Comfort 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 Comfort 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 Comfort Balanced and Edgepoint Cdn Growth, you can compare the effects of market volatilities on TD Comfort 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 Comfort with a short position of Edgepoint Cdn. Check out your portfolio center. Please also check ongoing floating volatility patterns of TD Comfort and Edgepoint Cdn.

Diversification Opportunities for TD Comfort and Edgepoint Cdn

0P0001FAU8EdgepointDiversified Away0P0001FAU8EdgepointDiversified Away100%
0.81
  Correlation Coefficient

Very poor diversification

The 3 months correlation between 0P0001FAU8 and Edgepoint is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding TD Comfort Balanced 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 Comfort 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 Comfort Balanced 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 Comfort i.e., TD Comfort and Edgepoint Cdn go up and down completely randomly.

Pair Corralation between TD Comfort and Edgepoint Cdn

Assuming the 90 days trading horizon TD Comfort Balanced is expected to generate 0.91 times more return on investment than Edgepoint Cdn. However, TD Comfort Balanced is 1.1 times less risky than Edgepoint Cdn. It trades about 0.08 of its potential returns per unit of risk. Edgepoint Cdn Growth is currently generating about 0.04 per unit of risk. If you would invest  1,292  in TD Comfort Balanced on November 21, 2024 and sell it today you would earn a total of  24.00  from holding TD Comfort Balanced or generate 1.86% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

TD Comfort Balanced  vs.  Edgepoint Cdn Growth

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -4-3-2-10123
JavaScript chart by amCharts 3.21.150P0001FAU8 0P0000JO4R
       Timeline  
TD Comfort Balanced 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in TD Comfort Balanced are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable technical and fundamental indicators, TD Comfort is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb12.812.91313.113.213.3
Edgepoint Cdn Growth 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Edgepoint Cdn Growth are ranked lower than 2 (%) 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 latest stock price chaos, may contribute to medium-term losses for the stakeholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb30.630.83131.231.431.631.832

TD Comfort and Edgepoint Cdn Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.19-0.87-0.55-0.23-0.0050510.210.530.851.171.49 0.51.01.52.02.5
JavaScript chart by amCharts 3.21.150P0001FAU8 0P0000JO4R
       Returns  

Pair Trading with TD Comfort and Edgepoint Cdn

The main advantage of trading using opposite TD Comfort and Edgepoint Cdn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TD Comfort 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 Comfort Balanced 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.

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