Correlation Between BetaPro NASDAQ and TD Canadian
Can any of the company-specific risk be diversified away by investing in both BetaPro NASDAQ and TD 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 BetaPro NASDAQ and TD Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BetaPro NASDAQ 100 2x and TD Canadian Long, you can compare the effects of market volatilities on BetaPro NASDAQ and TD 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 BetaPro NASDAQ with a short position of TD Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of BetaPro NASDAQ and TD Canadian.
Diversification Opportunities for BetaPro NASDAQ and TD Canadian
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BetaPro and TCLB is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding BetaPro NASDAQ 100 2x and TD Canadian Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TD Canadian Long and BetaPro NASDAQ 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 BetaPro NASDAQ 100 2x are associated (or correlated) with TD Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TD Canadian Long has no effect on the direction of BetaPro NASDAQ i.e., BetaPro NASDAQ and TD Canadian go up and down completely randomly.
Pair Corralation between BetaPro NASDAQ and TD Canadian
Assuming the 90 days trading horizon BetaPro NASDAQ 100 2x is expected to under-perform the TD Canadian. In addition to that, BetaPro NASDAQ is 2.94 times more volatile than TD Canadian Long. It trades about -0.41 of its total potential returns per unit of risk. TD Canadian Long is currently generating about -0.08 per unit of volatility. If you would invest 11,560 in TD Canadian Long on April 21, 2025 and sell it today you would lose (418.00) from holding TD Canadian Long or give up 3.62% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.44% |
Values | Daily Returns |
BetaPro NASDAQ 100 2x vs. TD Canadian Long
Performance |
Timeline |
BetaPro NASDAQ 100 |
TD Canadian Long |
BetaPro NASDAQ and TD Canadian Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with BetaPro NASDAQ and TD Canadian
The main advantage of trading using opposite BetaPro NASDAQ and TD Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BetaPro NASDAQ position performs unexpectedly, TD 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 TD Canadian will offset losses from the drop in TD Canadian's long position.BetaPro NASDAQ vs. BetaPro SP 500 | BetaPro NASDAQ vs. BetaPro NASDAQ 100 2x | BetaPro NASDAQ vs. BetaPro SP 500 | BetaPro NASDAQ vs. BetaPro SPTSX 60 |
TD Canadian vs. NBI High Yield | TD Canadian vs. NBI Unconstrained Fixed | TD Canadian vs. Mackenzie Developed ex North | TD Canadian vs. BMO Short Term Bond |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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