Correlation Between WaveFront All and TD Dividend

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

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

Diversification Opportunities for WaveFront All and TD Dividend

0.9

Correlation Coefficient

WaveFront All  TD Dividend

Almost no diversification

The 3 months correlation between WaveFront and 0P00016N6E is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding WaveFront All Weather Alternat and TD Dividend Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TD Dividend Growth and WaveFront All 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 WaveFront All Weather Alternative are associated (or correlated) with TD Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TD Dividend Growth has no effect on the direction of WaveFront All i.e., WaveFront All and TD Dividend go up and down completely randomly.

Pair Corralation between WaveFront All and TD Dividend

Assuming the 90 days trading horizon WaveFront All is expected to generate 2.14 times less return on investment than TD Dividend. In addition to that, WaveFront All is 1.27 times more volatile than TD Dividend Growth. It trades about 0.17 of its total potential returns per unit of risk. TD Dividend Growth is currently generating about 0.46 per unit of volatility. If you would invest  1,753  in TD Dividend Growth on April 20, 2025 and sell it today you would earn a total of  270.00  from holding TD Dividend Growth or generate 15.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

WaveFront All Weather Alternat  vs.  TD Dividend Growth

WaveFront All Weather

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WaveFront All Weather Alternative are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of very unfluctuating basic indicators, WaveFront All may actually be approaching a critical reversion point that can send shares even higher in August 2025.

TD Dividend Growth

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in TD Dividend Growth are ranked lower than 35 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat unfluctuating basic indicators, TD Dividend sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with WaveFront All and TD Dividend

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

The idea behind WaveFront All Weather Alternative and TD Dividend Growth 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.