Correlation Between TD Canadian and Evolve Enhanced

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

By analyzing existing cross correlation between TD Canadian Bond and Evolve Enhanced Yield, you can compare the effects of market volatilities on TD Canadian and Evolve Enhanced 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 Evolve Enhanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of TD Canadian and Evolve Enhanced.

Diversification Opportunities for TD Canadian and Evolve Enhanced

0.16

Correlation Coefficient

TD Canadian  Evolve Enhanced

Average diversification

The 3 months correlation between TDB909 and Evolve is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding TD Canadian Bond and Evolve Enhanced Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolve Enhanced Yield 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 Bond are associated (or correlated) with Evolve Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolve Enhanced Yield has no effect on the direction of TD Canadian i.e., TD Canadian and Evolve Enhanced go up and down completely randomly.

Pair Corralation between TD Canadian and Evolve Enhanced

Assuming the 90 days trading horizon TD Canadian Bond is expected to under-perform the Evolve Enhanced. But the fund apears to be less risky and, when comparing its historical volatility, TD Canadian Bond is 1.69 times less risky than Evolve Enhanced. The fund trades about -0.09 of its potential returns per unit of risk. The Evolve Enhanced Yield is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,935  in Evolve Enhanced Yield on April 23, 2025 and sell it today you would lose (2.00) from holding Evolve Enhanced Yield or give up 0.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

TD Canadian Bond  vs.  Evolve Enhanced Yield

TD Canadian Bond

Risk-Adjusted Performance

Very Weak

Over the last 90 days TD Canadian Bond has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong fundamental drivers, TD Canadian is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Evolve Enhanced Yield

Risk-Adjusted Performance

Very Weak

Over the last 90 days Evolve Enhanced Yield has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy basic indicators, Evolve Enhanced is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with TD Canadian and Evolve Enhanced

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

The idea behind TD Canadian Bond and Evolve Enhanced Yield 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.