Correlation Between TD Index and IProfile ETF

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

By analyzing existing cross correlation between TD Index Fund E and iProfile ETF Private, you can compare the effects of market volatilities on TD Index and IProfile ETF 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 Index with a short position of IProfile ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of TD Index and IProfile ETF.

Diversification Opportunities for TD Index and IProfile ETF

0.99

Correlation Coefficient

TD Index  IProfile ETF

No risk reduction

The 3 months correlation between TDB902 and IProfile is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding TD Index Fund E and iProfile ETF Private in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iProfile ETF Private and TD Index 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 Index Fund E are associated (or correlated) with IProfile ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iProfile ETF Private has no effect on the direction of TD Index i.e., TD Index and IProfile ETF go up and down completely randomly.

Pair Corralation between TD Index and IProfile ETF

Assuming the 90 days trading horizon TD Index Fund E is expected to generate 1.32 times more return on investment than IProfile ETF. However, TD Index is 1.32 times more volatile than iProfile ETF Private. It trades about 0.25 of its potential returns per unit of risk. iProfile ETF Private is currently generating about 0.26 per unit of risk. If you would invest  13,372  in TD Index Fund E on April 24, 2025 and sell it today you would earn a total of  1,914  from holding TD Index Fund E or generate 14.31% return on investment over 90 days.

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

TD Index Fund E  vs.  iProfile ETF Private

TD Index Fund

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TD Index Fund E are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat fragile fundamental drivers, TD Index sustained solid returns over the last few months and may actually be approaching a breakup point.

iProfile ETF Private

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iProfile ETF Private are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. Despite quite weak essential indicators, IProfile ETF may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with TD Index and IProfile ETF

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

The idea behind TD Index Fund E and iProfile ETF Private 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.

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 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.