Correlation Between TD Index and RBC Discount
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By analyzing existing cross correlation between TD Index Fund and RBC Discount Bond, you can compare the effects of market volatilities on TD Index and RBC Discount 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 Index with a short position of RBC Discount. Check out your portfolio center. Please also check ongoing floating volatility patterns of TD Index and RBC Discount.
Diversification Opportunities for TD Index and RBC Discount
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between 0P000071W8 and RBC is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding TD Index Fund and RBC Discount Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Discount Bond and TD Index 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 Index Fund are associated (or correlated) with RBC Discount. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBC Discount Bond has no effect on the direction of TD Index i.e., TD Index and RBC Discount go up and down completely randomly.
Pair Corralation between TD Index and RBC Discount
Assuming the 90 days trading horizon TD Index Fund is expected to generate 2.11 times more return on investment than RBC Discount. However, TD Index is 2.11 times more volatile than RBC Discount Bond. It trades about 0.2 of its potential returns per unit of risk. RBC Discount Bond is currently generating about 0.21 per unit of risk. If you would invest 13,539 in TD Index Fund on September 24, 2024 and sell it today you would earn a total of 1,422 from holding TD Index Fund or generate 10.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
TD Index Fund vs. RBC Discount Bond
Performance |
Timeline |
TD Index Fund |
RBC Discount Bond |
TD Index and RBC Discount Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with TD Index and RBC Discount
The main advantage of trading using opposite TD Index and RBC Discount positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TD Index position performs unexpectedly, RBC Discount 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 RBC Discount will offset losses from the drop in RBC Discount's long position.TD Index vs. PHN Multi Style All Cap | TD Index vs. Mawer Equity A | TD Index vs. iShares Canadian HYBrid | TD Index vs. Altagas Cum Red |
RBC Discount vs. RBC Target 2029 | RBC Discount vs. RBC Quant Dividend | RBC Discount vs. RBC Quant EAFE | RBC Discount vs. RBC Quant European |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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