Correlation Between Russell Investments and TD Active

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

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

Diversification Opportunities for Russell Investments and TD Active

0.95

Correlation Coefficient

Russell Investments  TD Active

Almost no diversification

The 3 months correlation between Russell and TINF is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Russell Investments Global 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 Russell Investments 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 Russell Investments Global 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 Russell Investments i.e., Russell Investments and TD Active go up and down completely randomly.

Pair Corralation between Russell Investments and TD Active

Assuming the 90 days trading horizon Russell Investments is expected to generate 1.08 times less return on investment than TD Active. In addition to that, Russell Investments is 1.02 times more volatile than TD Active Global. It trades about 0.15 of its total potential returns per unit of risk. TD Active Global is currently generating about 0.17 per unit of volatility. If you would invest  2,162  in TD Active Global on April 22, 2025 and sell it today you would earn a total of  137.00  from holding TD Active Global or generate 6.34% return on investment over 90 days.

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

Russell Investments Global  vs.  TD Active Global

Russell Investments

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Russell Investments Global are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Russell Investments is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

TD Active Global

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TD Active Global are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, TD Active is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Russell Investments and TD Active

The main advantage of trading using opposite Russell Investments and TD Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Russell Investments 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 Russell Investments Global 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.

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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.