Correlation Between CI Preferred and TD Active

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

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

Diversification Opportunities for CI Preferred and TD Active

0.99

Correlation Coefficient

CI Preferred  TD Active

No risk reduction

The 3 months correlation between FPR and TPRF is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding CI Preferred Share and TD Active Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TD Active Preferred and CI Preferred 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 CI Preferred Share 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 Preferred has no effect on the direction of CI Preferred i.e., CI Preferred and TD Active go up and down completely randomly.

Pair Corralation between CI Preferred and TD Active

Assuming the 90 days trading horizon CI Preferred is expected to generate 1.27 times less return on investment than TD Active. In addition to that, CI Preferred is 1.66 times more volatile than TD Active Preferred. It trades about 0.34 of its total potential returns per unit of risk. TD Active Preferred is currently generating about 0.71 per unit of volatility. If you would invest  1,058  in TD Active Preferred on April 22, 2025 and sell it today you would earn a total of  142.00  from holding TD Active Preferred or generate 13.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

CI Preferred Share  vs.  TD Active Preferred

CI Preferred Share

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in CI Preferred Share are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, CI Preferred may actually be approaching a critical reversion point that can send shares even higher in August 2025.

TD Active Preferred

Risk-Adjusted Performance

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in TD Active Preferred are ranked lower than 56 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, TD Active displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CI Preferred and TD Active

The main advantage of trading using opposite CI Preferred and TD Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Preferred 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 CI Preferred Share and TD Active Preferred 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.