Correlation Between Cumulus Media and TFI International
Can any of the company-specific risk be diversified away by investing in both Cumulus Media and TFI International 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 Cumulus Media and TFI International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cumulus Media Class and TFI International, you can compare the effects of market volatilities on Cumulus Media and TFI International 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 Cumulus Media with a short position of TFI International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cumulus Media and TFI International.
Diversification Opportunities for Cumulus Media and TFI International
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Cumulus and TFI is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Cumulus Media Class and TFI International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TFI International and Cumulus Media 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 Cumulus Media Class are associated (or correlated) with TFI International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TFI International has no effect on the direction of Cumulus Media i.e., Cumulus Media and TFI International go up and down completely randomly.
Pair Corralation between Cumulus Media and TFI International
Given the investment horizon of 90 days Cumulus Media Class is expected to under-perform the TFI International. In addition to that, Cumulus Media is 2.36 times more volatile than TFI International. It trades about -0.39 of its total potential returns per unit of risk. TFI International is currently generating about 0.19 per unit of volatility. If you would invest 13,615 in TFI International on August 28, 2024 and sell it today you would earn a total of 1,368 from holding TFI International or generate 10.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cumulus Media Class vs. TFI International
Performance |
| Timeline |
| Cumulus Media Class |
| TFI International |
Cumulus Media and TFI International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cumulus Media and TFI International
The main advantage of trading using opposite Cumulus Media and TFI International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cumulus Media position performs unexpectedly, TFI International 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 TFI International will offset losses from the drop in TFI International's long position.| Cumulus Media vs. Walt Disney | Cumulus Media vs. Roku Inc | Cumulus Media vs. Netflix | Cumulus Media vs. AMC Entertainment Holdings |
| TFI International vs. Old Dominion Freight | TFI International vs. ArcBest Corp | TFI International vs. Marten Transport | TFI International vs. Werner Enterprises |
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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