Correlation Between TD Comfort and PIMCO Canadian

Can any of the company-specific risk be diversified away by investing in both TD Comfort and PIMCO Canadian 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 PIMCO Canadian 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 PIMCO Canadian Core, you can compare the effects of market volatilities on TD Comfort and PIMCO Canadian 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 PIMCO Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of TD Comfort and PIMCO Canadian.

Diversification Opportunities for TD Comfort and PIMCO Canadian

0.48

Correlation Coefficient

TD Comfort  PIMCO Canadian

Very weak diversification

The 3 months correlation between 0P0001FAU8 and PIMCO is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding TD Comfort Balanced and PIMCO Canadian Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PIMCO Canadian Core 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 PIMCO Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PIMCO Canadian Core has no effect on the direction of TD Comfort i.e., TD Comfort and PIMCO Canadian go up and down completely randomly.

Pair Corralation between TD Comfort and PIMCO Canadian

Assuming the 90 days trading horizon TD Comfort Balanced is expected to generate 0.81 times more return on investment than PIMCO Canadian. However, TD Comfort Balanced is 1.24 times less risky than PIMCO Canadian. It trades about 0.15 of its potential returns per unit of risk. PIMCO Canadian Core is currently generating about 0.0 per unit of risk. If you would invest  1,287  in TD Comfort Balanced on September 14, 2024 and sell it today you would earn a total of  35.00  from holding TD Comfort Balanced or generate 2.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

TD Comfort Balanced  vs.  PIMCO Canadian Core

TD Comfort Balanced

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TD Comfort Balanced are ranked lower than 11 (%) 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.

PIMCO Canadian Core

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with TD Comfort and PIMCO Canadian

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

The idea behind TD Comfort Balanced and PIMCO Canadian Core 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.