Correlation Between TD Active and Brompton Global

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

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

Diversification Opportunities for TD Active and Brompton Global

0.95

Correlation Coefficient

TD Active  Brompton Global

Almost no diversification

The 3 months correlation between TPRF and Brompton is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding TD Active Preferred and Brompton Global Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brompton Global Dividend and TD Active 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 Active Preferred are associated (or correlated) with Brompton Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brompton Global Dividend has no effect on the direction of TD Active i.e., TD Active and Brompton Global go up and down completely randomly.

Pair Corralation between TD Active and Brompton Global

Assuming the 90 days trading horizon TD Active Preferred is expected to generate 0.36 times more return on investment than Brompton Global. However, TD Active Preferred is 2.79 times less risky than Brompton Global. It trades about 0.95 of its potential returns per unit of risk. Brompton Global Dividend is currently generating about 0.27 per unit of risk. If you would invest  1,154  in TD Active Preferred on April 20, 2025 and sell it today you would earn a total of  46.00  from holding TD Active Preferred or generate 3.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	95.45%
Values	Daily Returns

TD Active Preferred  vs.  Brompton Global Dividend

TD Active Preferred

Risk-Adjusted Performance

Market Crasher

Compared to the overall equity markets, risk-adjusted returns on investments in TD Active Preferred are ranked lower than 57 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, TD Active displayed solid returns over the last few months and may actually be approaching a breakup point.

Brompton Global Dividend

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Brompton Global Dividend are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Brompton Global may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with TD Active and Brompton Global

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

The idea behind TD Active Preferred and Brompton Global Dividend 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.