Correlation Between Toronto Dominion and Maple Peak

Can any of the company-specific risk be diversified away by investing in both Toronto Dominion and Maple Peak 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 Toronto Dominion and Maple Peak into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Toronto Dominion Bank and Maple Peak Investments, you can compare the effects of market volatilities on Toronto Dominion and Maple Peak 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 Toronto Dominion with a short position of Maple Peak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Toronto Dominion and Maple Peak.

Diversification Opportunities for Toronto Dominion and Maple Peak

0.0

Correlation Coefficient

Toronto Dominion  Maple Peak

Pay attention - limited upside

The 3 months correlation between Toronto and Maple is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Toronto Dominion Bank and Maple Peak Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maple Peak Investments and Toronto Dominion 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 Toronto Dominion Bank are associated (or correlated) with Maple Peak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maple Peak Investments has no effect on the direction of Toronto Dominion i.e., Toronto Dominion and Maple Peak go up and down completely randomly.

Pair Corralation between Toronto Dominion and Maple Peak

Assuming the 90 days horizon Toronto Dominion Bank is expected to under-perform the Maple Peak. But the stock apears to be less risky and, when comparing its historical volatility, Toronto Dominion Bank is 11.64 times less risky than Maple Peak. The stock trades about -0.01 of its potential returns per unit of risk. The Maple Peak Investments is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1.00  in Maple Peak Investments on September 24, 2024 and sell it today you would earn a total of  0.00  from holding Maple Peak Investments or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Toronto Dominion Bank  vs.  Maple Peak Investments

Toronto Dominion Bank

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Toronto Dominion Bank has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Maple Peak Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maple Peak Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Maple Peak is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Toronto Dominion and Maple Peak

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

The idea behind Toronto Dominion Bank and Maple Peak Investments 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.