Correlation Between TD One and BMO Growth

Can any of the company-specific risk be diversified away by investing in both TD One and BMO 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 BMO 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 BMO Growth ETF, you can compare the effects of market volatilities on TD One and BMO 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 BMO Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of TD One and BMO Growth.

Diversification Opportunities for TD One and BMO Growth

0.98

Correlation Coefficient

TD One  BMO Growth

Almost no diversification

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

Pair Corralation between TD One and BMO Growth

Assuming the 90 days trading horizon TD One Click Aggressive is expected to generate 0.99 times more return on investment than BMO Growth. However, TD One Click Aggressive is 1.01 times less risky than BMO Growth. It trades about 0.4 of its potential returns per unit of risk. BMO Growth ETF is currently generating about 0.36 per unit of risk. If you would invest  2,127  in TD One Click Aggressive on April 21, 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	98.44%
Values	Daily Returns

TD One Click Aggressive  vs.  BMO Growth ETF

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.

BMO Growth ETF

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in BMO Growth ETF are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, BMO Growth may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with TD One and BMO Growth

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

The idea behind TD One Click Aggressive and BMO Growth ETF 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.