Correlation Between CIBC Equity and TD Active

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

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

Diversification Opportunities for CIBC Equity and TD Active

0.0

Correlation Coefficient

CIBC Equity  TD Active

Pay attention - limited upside

The 3 months correlation between CIBC and TGED is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CIBC Equity Index and TD Active Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TD Active Global and CIBC Equity 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 CIBC Equity Index are associated (or correlated) with TD Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TD Active Global has no effect on the direction of CIBC Equity i.e., CIBC Equity and TD Active go up and down completely randomly.

Pair Corralation between CIBC Equity and TD Active

If you would invest  2,750  in TD Active Global on October 24, 2024 and sell it today you would earn a total of  48.00  from holding TD Active Global or generate 1.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.26%
Values	Daily Returns

CIBC Equity Index  vs.  TD Active Global

CIBC Equity Index

Risk-Adjusted Performance

0 of 100

OK

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

TD Active Global

Risk-Adjusted Performance

9 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TD Active Global are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, TD Active may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with CIBC Equity and TD Active

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

The idea behind CIBC Equity Index and TD Active Global 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.

Check out your portfolio center.

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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.