Correlation Between TD Canadian and IShares Gold
Can any of the company-specific risk be diversified away by investing in both TD Canadian and IShares Gold 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 TD Canadian and IShares Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TD Canadian Long and iShares Gold Bullion, you can compare the effects of market volatilities on TD Canadian and IShares Gold 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 TD Canadian with a short position of IShares Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of TD Canadian and IShares Gold.
Diversification Opportunities for TD Canadian and IShares Gold
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between TCLB and IShares is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding TD Canadian Long and iShares Gold Bullion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Gold Bullion and TD Canadian 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 TD Canadian Long are associated (or correlated) with IShares Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Gold Bullion has no effect on the direction of TD Canadian i.e., TD Canadian and IShares Gold go up and down completely randomly.
Pair Corralation between TD Canadian and IShares Gold
Assuming the 90 days trading horizon TD Canadian Long is expected to under-perform the IShares Gold. But the etf apears to be less risky and, when comparing its historical volatility, TD Canadian Long is 1.77 times less risky than IShares Gold. The etf trades about -0.08 of its potential returns per unit of risk. The iShares Gold Bullion is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 3,987 in iShares Gold Bullion on April 21, 2025 and sell it today you would lose (126.00) from holding iShares Gold Bullion or give up 3.16% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
TD Canadian Long vs. iShares Gold Bullion
Performance |
Timeline |
TD Canadian Long |
iShares Gold Bullion |
TD Canadian and IShares Gold Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with TD Canadian and IShares Gold
The main advantage of trading using opposite TD Canadian and IShares Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TD Canadian position performs unexpectedly, IShares Gold 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 IShares Gold will offset losses from the drop in IShares Gold's long position.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 |
IShares Gold vs. iShares SPTSX 60 | IShares Gold vs. iShares Core SP | IShares Gold vs. iShares Core SPTSX | IShares Gold vs. BMO Aggregate 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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