Correlation Between TD Canadian and Global X

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

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

Diversification Opportunities for TD Canadian and Global X

-0.67

Correlation Coefficient

TD Canadian  Global X

Excellent diversification

The 3 months correlation between TCLB and Global is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding TD Canadian Long and Global X Canadian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Canadian and TD Canadian 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 Canadian Long are associated (or correlated) with Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Canadian has no effect on the direction of TD Canadian i.e., TD Canadian and Global X go up and down completely randomly.

Pair Corralation between TD Canadian and Global X

Assuming the 90 days trading horizon TD Canadian Long is expected to under-perform the Global X. In addition to that, TD Canadian is 1.03 times more volatile than Global X Canadian. It trades about -0.13 of its total potential returns per unit of risk. Global X Canadian is currently generating about 0.24 per unit of volatility. If you would invest  964.00  in Global X Canadian on April 30, 2025 and sell it today you would earn a total of  97.00  from holding Global X Canadian or generate 10.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

TD Canadian Long  vs.  Global X Canadian

TD Canadian Long

Risk-Adjusted Performance

Very Weak

Over the last 90 days TD Canadian Long has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, TD Canadian is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Global X Canadian

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Canadian are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Global X may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with TD Canadian and Global X

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

The idea behind TD Canadian Long and Global X Canadian 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.

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.