Correlation Between TD One and Vanguard Growth

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

By analyzing existing cross correlation between TD One Click Aggressive and Vanguard Growth Portfolio, you can compare the effects of market volatilities on TD One and Vanguard Growth 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 One with a short position of Vanguard Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of TD One and Vanguard Growth.

Diversification Opportunities for TD One and Vanguard Growth

0.98

Correlation Coefficient

TD One  Vanguard Growth

Almost no diversification

The 3 months correlation between TOCA and Vanguard is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding TD One Click Aggressive and Vanguard Growth Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Growth Portfolio and TD One 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 One Click Aggressive are associated (or correlated) with Vanguard Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Growth Portfolio has no effect on the direction of TD One i.e., TD One and Vanguard Growth go up and down completely randomly.

Pair Corralation between TD One and Vanguard Growth

Assuming the 90 days trading horizon TD One Click Aggressive is expected to generate 1.0 times more return on investment than Vanguard Growth. However, TD One is 1.0 times more volatile than Vanguard Growth Portfolio. It trades about 0.4 of its potential returns per unit of risk. Vanguard Growth Portfolio is currently generating about 0.38 per unit of risk. If you would invest  2,127  in TD One Click Aggressive on April 20, 2025 and sell it today you would earn a total of  305.00  from holding TD One Click Aggressive or generate 14.34% return on investment over 90 days.

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

TD One Click Aggressive  vs.  Vanguard Growth Portfolio

TD One Click

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in TD One Click Aggressive are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, TD One displayed solid returns over the last few months and may actually be approaching a breakup point.

Vanguard Growth Portfolio

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Growth Portfolio are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Vanguard Growth displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TD One and Vanguard Growth

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

The idea behind TD One Click Aggressive and Vanguard Growth Portfolio 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.