Correlation Between Toronto Dominion and Pineapple Financial

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

Diversification Opportunities for Toronto Dominion and Pineapple Financial

0.25

Correlation Coefficient

Toronto Dominion  Pineapple Financial

Modest diversification

The 3 months correlation between Toronto and Pineapple is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Toronto Dominion Bank and Pineapple Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pineapple Financial 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 Pineapple Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pineapple Financial has no effect on the direction of Toronto Dominion i.e., Toronto Dominion and Pineapple Financial go up and down completely randomly.

Pair Corralation between Toronto Dominion and Pineapple Financial

Allowing for the 90-day total investment horizon Toronto Dominion Bank is expected to under-perform the Pineapple Financial. But the stock apears to be less risky and, when comparing its historical volatility, Toronto Dominion Bank is 42.1 times less risky than Pineapple Financial. The stock trades about -0.08 of its potential returns per unit of risk. The Pineapple Financial is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  188.00  in Pineapple Financial on May 5, 2025 and sell it today you would earn a total of  243.00  from holding Pineapple Financial or generate 129.26% return on investment over 90 days.

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

Toronto Dominion Bank  vs.  Pineapple Financial

Toronto Dominion Bank

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Toronto Dominion Bank are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Toronto Dominion exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pineapple Financial

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pineapple Financial are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain basic indicators, Pineapple Financial disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Toronto Dominion and Pineapple Financial

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

The idea behind Toronto Dominion Bank and Pineapple Financial 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.