Correlation Between PICTON Credit and TD Dividend

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

By analyzing existing cross correlation between PICTON Credit Opportunities and TD Dividend Growth, you can compare the effects of market volatilities on PICTON Credit and TD Dividend 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 PICTON Credit with a short position of TD Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of PICTON Credit and TD Dividend.

Diversification Opportunities for PICTON Credit and TD Dividend

0.93

Correlation Coefficient

PICTON Credit  TD Dividend

Almost no diversification

The 3 months correlation between PICTON and 0P00016N6E is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding PICTON Credit Opportunities and TD Dividend Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TD Dividend Growth and PICTON Credit 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 PICTON Credit Opportunities are associated (or correlated) with TD Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TD Dividend Growth has no effect on the direction of PICTON Credit i.e., PICTON Credit and TD Dividend go up and down completely randomly.

Pair Corralation between PICTON Credit and TD Dividend

Assuming the 90 days trading horizon PICTON Credit is expected to generate 4.43 times less return on investment than TD Dividend. But when comparing it to its historical volatility, PICTON Credit Opportunities is 1.36 times less risky than TD Dividend. It trades about 0.14 of its potential returns per unit of risk. TD Dividend Growth is currently generating about 0.46 of returns per unit of risk over similar time horizon. If you would invest  1,753  in TD Dividend Growth on April 20, 2025 and sell it today you would earn a total of  270.00  from holding TD Dividend Growth or generate 15.4% return on investment over 90 days.

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

PICTON Credit Opportunities  vs.  TD Dividend Growth

PICTON Credit Opport

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PICTON Credit Opportunities are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of very healthy basic indicators, PICTON Credit is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

TD Dividend Growth

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in TD Dividend Growth are ranked lower than 35 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat unfluctuating basic indicators, TD Dividend sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PICTON Credit and TD Dividend

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

The idea behind PICTON Credit Opportunities and TD Dividend Growth 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.