Correlation Between Toronto Dominion and Medexus Pharmaceuticals

Can any of the company-specific risk be diversified away by investing in both Toronto Dominion and Medexus Pharmaceuticals 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 Medexus Pharmaceuticals 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 Medexus Pharmaceuticals, you can compare the effects of market volatilities on Toronto Dominion and Medexus Pharmaceuticals 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 Medexus Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Toronto Dominion and Medexus Pharmaceuticals.

Diversification Opportunities for Toronto Dominion and Medexus Pharmaceuticals

-0.26

Correlation Coefficient

Toronto Dominion  Medexus Pharmaceuticals

Very good diversification

The 3 months correlation between Toronto and Medexus is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Toronto Dominion Bank and Medexus Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medexus Pharmaceuticals 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 Medexus Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medexus Pharmaceuticals has no effect on the direction of Toronto Dominion i.e., Toronto Dominion and Medexus Pharmaceuticals go up and down completely randomly.

Pair Corralation between Toronto Dominion and Medexus Pharmaceuticals

Assuming the 90 days trading horizon Toronto Dominion is expected to generate 4.23 times less return on investment than Medexus Pharmaceuticals. But when comparing it to its historical volatility, Toronto Dominion Bank is 25.39 times less risky than Medexus Pharmaceuticals. It trades about 0.1 of its potential returns per unit of risk. Medexus Pharmaceuticals is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  287.00  in Medexus Pharmaceuticals on July 27, 2025 and sell it today you would earn a total of  0.00  from holding Medexus Pharmaceuticals or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	83.87%
Values	Daily Returns

Toronto Dominion Bank  vs.  Medexus Pharmaceuticals

Toronto Dominion Bank

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Toronto Dominion Bank are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Toronto Dominion is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Medexus Pharmaceuticals

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Medexus Pharmaceuticals are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Medexus Pharmaceuticals is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Toronto Dominion and Medexus Pharmaceuticals

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

The idea behind Toronto Dominion Bank and Medexus Pharmaceuticals 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.