Correlation Between TD Global and Middlefield Healthcare

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

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

Diversification Opportunities for TD Global and Middlefield Healthcare

0.08

Correlation Coefficient

TD Global  Middlefield Healthcare

Significant diversification

The 3 months correlation between TDOC and Middlefield is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding TD Global Healthcare and Middlefield Healthcare Life in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Middlefield Healthcare and TD Global 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 Global Healthcare are associated (or correlated) with Middlefield Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Middlefield Healthcare has no effect on the direction of TD Global i.e., TD Global and Middlefield Healthcare go up and down completely randomly.

Pair Corralation between TD Global and Middlefield Healthcare

Assuming the 90 days trading horizon TD Global Healthcare is expected to under-perform the Middlefield Healthcare. But the etf apears to be less risky and, when comparing its historical volatility, TD Global Healthcare is 1.14 times less risky than Middlefield Healthcare. The etf trades about -0.01 of its potential returns per unit of risk. The Middlefield Healthcare Life is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,073  in Middlefield Healthcare Life on April 23, 2025 and sell it today you would lose (2.00) from holding Middlefield Healthcare Life or give up 0.19% of portfolio value over 90 days.

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

TD Global Healthcare  vs.  Middlefield Healthcare Life

TD Global Healthcare

Risk-Adjusted Performance

Very Weak

Over the last 90 days TD Global Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, TD Global is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Middlefield Healthcare

Risk-Adjusted Performance

Very Weak

Over the last 90 days Middlefield Healthcare Life has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Middlefield Healthcare 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 Global and Middlefield Healthcare

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

The idea behind TD Global Healthcare and Middlefield Healthcare Life 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..