Correlation Between Toronto Dominion and Great West
Can any of the company-specific risk be diversified away by investing in both Toronto Dominion and Great West 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 Great West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Toronto Dominion Bank Pref and Great West Lifeco, you can compare the effects of market volatilities on Toronto Dominion and Great West 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 Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Toronto Dominion and Great West.
Diversification Opportunities for Toronto Dominion and Great West
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Toronto and Great is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Toronto Dominion Bank Pref and Great West Lifeco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Lifeco 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 Pref are associated (or correlated) with Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Lifeco has no effect on the direction of Toronto Dominion i.e., Toronto Dominion and Great West go up and down completely randomly.
Pair Corralation between Toronto Dominion and Great West
Assuming the 90 days trading horizon Toronto Dominion is expected to generate 3.26 times less return on investment than Great West. But when comparing it to its historical volatility, Toronto Dominion Bank Pref is 1.69 times less risky than Great West. It trades about 0.15 of its potential returns per unit of risk. Great West Lifeco is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 5,817 in Great West Lifeco on October 12, 2025 and sell it today you would earn a total of 909.00 from holding Great West Lifeco or generate 15.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 93.44% |
| Values | Daily Returns |
Toronto Dominion Bank Pref vs. Great West Lifeco
Performance |
| Timeline |
| Toronto Dominion Bank |
| Great West Lifeco |
Toronto Dominion and Great West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Toronto Dominion and Great West
The main advantage of trading using opposite Toronto Dominion and Great West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Toronto Dominion position performs unexpectedly, Great West 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 Great West will offset losses from the drop in Great West's long position.| Toronto Dominion vs. Great West Lifeco | Toronto Dominion vs. Manulife Financial Corp | Toronto Dominion vs. Sun Life Financial | Toronto Dominion vs. Fairfax Financial Holdings |
| Great West vs. Manulife Financial Corp | Great West vs. Power | Great West vs. Sun Life Financial | Great West vs. Fairfax Financial Holdings |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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