Correlation Between Gildan Activewear and TFI International
Can any of the company-specific risk be diversified away by investing in both Gildan Activewear 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 Gildan Activewear and TFI International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gildan Activewear and TFI International, you can compare the effects of market volatilities on Gildan Activewear 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 Gildan Activewear with a short position of TFI International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gildan Activewear and TFI International.
Diversification Opportunities for Gildan Activewear and TFI International
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Gildan and TFI is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Gildan Activewear and TFI International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TFI International and Gildan Activewear 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 Gildan Activewear 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 Gildan Activewear i.e., Gildan Activewear and TFI International go up and down completely randomly.
Pair Corralation between Gildan Activewear and TFI International
Assuming the 90 days trading horizon Gildan Activewear is expected to generate 2.94 times less return on investment than TFI International. But when comparing it to its historical volatility, Gildan Activewear is 2.93 times less risky than TFI International. It trades about 0.17 of its potential returns per unit of risk. TFI International is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 18,844 in TFI International on August 30, 2024 and sell it today you would earn a total of 1,833 from holding TFI International or generate 9.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Gildan Activewear vs. TFI International
Performance |
| Timeline |
| Gildan Activewear |
| TFI International |
Gildan Activewear and TFI International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gildan Activewear and TFI International
The main advantage of trading using opposite Gildan Activewear and TFI International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gildan Activewear 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.| Gildan Activewear vs. Saputo Inc | Gildan Activewear vs. CCL Industries | Gildan Activewear vs. Thomson Reuters Corp | Gildan Activewear vs. George Weston Limited |
| TFI International vs. WSP Global | TFI International vs. Waste Connections | TFI International vs. Open Text Corp | TFI International vs. Cargojet |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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