Correlation Between HEALTHCARE TRPFD and Toronto Dominion

Can any of the company-specific risk be diversified away by investing in both HEALTHCARE TRPFD and Toronto Dominion 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 HEALTHCARE TRPFD and Toronto Dominion into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HEALTHCARE TRPFD SH and The Toronto Dominion Bank, you can compare the effects of market volatilities on HEALTHCARE TRPFD and Toronto Dominion 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 HEALTHCARE TRPFD with a short position of Toronto Dominion. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEALTHCARE TRPFD and Toronto Dominion.

Diversification Opportunities for HEALTHCARE TRPFD and Toronto Dominion

0.67

Correlation Coefficient

HEALTHCARE TRPFD  Toronto Dominion

Poor diversification

The 3 months correlation between HEALTHCARE and Toronto is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding HEALTHCARE TRPFD SH and The Toronto Dominion Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toronto Dominion and HEALTHCARE TRPFD 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 HEALTHCARE TRPFD SH are associated (or correlated) with Toronto Dominion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toronto Dominion has no effect on the direction of HEALTHCARE TRPFD i.e., HEALTHCARE TRPFD and Toronto Dominion go up and down completely randomly.

Pair Corralation between HEALTHCARE TRPFD and Toronto Dominion

Assuming the 90 days horizon HEALTHCARE TRPFD is expected to generate 1.23 times less return on investment than Toronto Dominion. In addition to that, HEALTHCARE TRPFD is 2.15 times more volatile than The Toronto Dominion Bank. It trades about 0.12 of its total potential returns per unit of risk. The Toronto Dominion Bank is currently generating about 0.32 per unit of volatility. If you would invest  5,211  in The Toronto Dominion Bank on April 20, 2025 and sell it today you would earn a total of  1,139  from holding The Toronto Dominion Bank or generate 21.86% return on investment over 90 days.

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

HEALTHCARE TRPFD SH  vs.  The Toronto Dominion Bank

HEALTHCARE TRPFD

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HEALTHCARE TRPFD SH are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, HEALTHCARE TRPFD reported solid returns over the last few months and may actually be approaching a breakup point.

Toronto Dominion

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in The Toronto Dominion Bank are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Toronto Dominion reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HEALTHCARE TRPFD and Toronto Dominion

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

The idea behind HEALTHCARE TRPFD SH and The Toronto Dominion Bank 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.