Correlation Between TFI International and Exchange Income
Can any of the company-specific risk be diversified away by investing in both TFI International and Exchange Income 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 TFI International and Exchange Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TFI International and Exchange Income, you can compare the effects of market volatilities on TFI International and Exchange Income 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 TFI International with a short position of Exchange Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of TFI International and Exchange Income.
Diversification Opportunities for TFI International and Exchange Income
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between TFI and Exchange is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding TFI International and Exchange Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exchange Income and TFI International 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 TFI International are associated (or correlated) with Exchange Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exchange Income has no effect on the direction of TFI International i.e., TFI International and Exchange Income go up and down completely randomly.
Pair Corralation between TFI International and Exchange Income
Assuming the 90 days trading horizon TFI International is expected to under-perform the Exchange Income. In addition to that, TFI International is 2.12 times more volatile than Exchange Income. It trades about -0.13 of its total potential returns per unit of risk. Exchange Income is currently generating about -0.05 per unit of volatility. If you would invest 5,447 in Exchange Income on January 18, 2025 and sell it today you would lose (563.00) from holding Exchange Income or give up 10.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
TFI International vs. Exchange Income
Performance |
| Timeline |
| TFI International |
| Exchange Income |
TFI International and Exchange Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TFI International and Exchange Income
The main advantage of trading using opposite TFI International and Exchange Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TFI International position performs unexpectedly, Exchange Income 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 Exchange Income will offset losses from the drop in Exchange Income's long position.| TFI International vs. WSP Global | TFI International vs. Waste Connections | TFI International vs. Open Text Corp | TFI International vs. Cargojet |
| Exchange Income vs. Capital Power | Exchange Income vs. Keyera Corp | Exchange Income vs. Parkland Fuel | Exchange Income vs. TFI International |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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