Correlation Between TFI International and Equitable
Can any of the company-specific risk be diversified away by investing in both TFI International and Equitable 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 Equitable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TFI International and Equitable Group, you can compare the effects of market volatilities on TFI International and Equitable 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 Equitable. Check out your portfolio center. Please also check ongoing floating volatility patterns of TFI International and Equitable.
Diversification Opportunities for TFI International and Equitable
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between TFI and Equitable is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding TFI International and Equitable Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equitable Group 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 Equitable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equitable Group has no effect on the direction of TFI International i.e., TFI International and Equitable go up and down completely randomly.
Pair Corralation between TFI International and Equitable
Assuming the 90 days trading horizon TFI International is expected to generate 2.42 times more return on investment than Equitable. However, TFI International is 2.42 times more volatile than Equitable Group. It trades about 0.19 of its potential returns per unit of risk. Equitable Group is currently generating about 0.19 per unit of risk. If you would invest 18,900 in TFI International on August 29, 2024 and sell it today you would earn a total of 2,080 from holding TFI International or generate 11.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TFI International vs. Equitable Group
Performance |
| Timeline |
| TFI International |
| Equitable Group |
TFI International and Equitable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TFI International and Equitable
The main advantage of trading using opposite TFI International and Equitable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TFI International position performs unexpectedly, Equitable 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 Equitable will offset losses from the drop in Equitable's long position.| TFI International vs. WSP Global | TFI International vs. Waste Connections | TFI International vs. Open Text Corp | TFI International vs. Cargojet |
| Equitable vs. goeasy | Equitable vs. Canadian Western Bank | Equitable vs. TFI International | Equitable vs. Intact Financial |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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