Correlation Between TD Active and RBC Canadian
Can any of the company-specific risk be diversified away by investing in both TD Active and RBC Canadian 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 Active and RBC Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TD Active Preferred and RBC Canadian Bank, you can compare the effects of market volatilities on TD Active and RBC Canadian 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 Active with a short position of RBC Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of TD Active and RBC Canadian.
Diversification Opportunities for TD Active and RBC Canadian
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between TPRF and RBC is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding TD Active Preferred and RBC Canadian Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBC Canadian Bank and TD Active 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 Active Preferred are associated (or correlated) with RBC Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBC Canadian Bank has no effect on the direction of TD Active i.e., TD Active and RBC Canadian go up and down completely randomly.
Pair Corralation between TD Active and RBC Canadian
Assuming the 90 days trading horizon TD Active is expected to generate 4.23 times less return on investment than RBC Canadian. But when comparing it to its historical volatility, TD Active Preferred is 2.46 times less risky than RBC Canadian. It trades about 0.15 of its potential returns per unit of risk. RBC Canadian Bank is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 3,594 in RBC Canadian Bank on November 6, 2025 and sell it today you would earn a total of 426.00 from holding RBC Canadian Bank or generate 11.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
TD Active Preferred vs. RBC Canadian Bank
Performance |
| Timeline |
| TD Active Preferred |
| RBC Canadian Bank |
TD Active and RBC Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TD Active and RBC Canadian
The main advantage of trading using opposite TD Active and RBC Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TD Active position performs unexpectedly, RBC Canadian 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 RBC Canadian will offset losses from the drop in RBC Canadian's long position.| TD Active vs. Harvest Equal Weight | TD Active vs. Exemplar Growth and | TD Active vs. iShares SP Mid Cap | TD Active vs. iShares MSCI Min |
| RBC Canadian vs. CI Canadian Banks | RBC Canadian vs. AGFiQ Market Neutral | RBC Canadian vs. iShares MSCI Canada | RBC Canadian vs. Hamilton Gold Producer |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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