Correlation Between IShares Core and TD Q

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

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

Diversification Opportunities for IShares Core and TD Q

0.96

Correlation Coefficient

IShares Core  TD Q

Almost no diversification

The 3 months correlation between IShares and TQGD is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core MSCI and TD Q Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TD Q Global and IShares Core 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 iShares Core MSCI are associated (or correlated) with TD Q. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TD Q Global has no effect on the direction of IShares Core i.e., IShares Core and TD Q go up and down completely randomly.

Pair Corralation between IShares Core and TD Q

Assuming the 90 days trading horizon IShares Core is expected to generate 2.47 times less return on investment than TD Q. But when comparing it to its historical volatility, iShares Core MSCI is 1.19 times less risky than TD Q. It trades about 0.11 of its potential returns per unit of risk. TD Q Global is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  1,917  in TD Q Global on April 24, 2025 and sell it today you would earn a total of  204.00  from holding TD Q Global or generate 10.64% return on investment over 90 days.

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

iShares Core MSCI  vs.  TD Q Global

iShares Core MSCI

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Core MSCI are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, IShares Core is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

TD Q Global

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TD Q Global are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, TD Q may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with IShares Core and TD Q

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

The idea behind iShares Core MSCI and TD Q Global 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.