Correlation Between TFI International and Waste Connections
Can any of the company-specific risk be diversified away by investing in both TFI International and Waste Connections 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 Waste Connections into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TFI International and Waste Connections, you can compare the effects of market volatilities on TFI International and Waste Connections 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 Waste Connections. Check out your portfolio center. Please also check ongoing floating volatility patterns of TFI International and Waste Connections.
Diversification Opportunities for TFI International and Waste Connections
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TFI and Waste is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding TFI International and Waste Connections in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waste Connections 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 Waste Connections. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waste Connections has no effect on the direction of TFI International i.e., TFI International and Waste Connections go up and down completely randomly.
Pair Corralation between TFI International and Waste Connections
Assuming the 90 days trading horizon TFI International is expected to generate 8.47 times less return on investment than Waste Connections. In addition to that, TFI International is 1.17 times more volatile than Waste Connections. It trades about 0.03 of its total potential returns per unit of risk. Waste Connections is currently generating about 0.34 per unit of volatility. If you would invest 24,476 in Waste Connections on November 3, 2024 and sell it today you would earn a total of 2,229 from holding Waste Connections or generate 9.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TFI International vs. Waste Connections
Performance |
| Timeline |
| TFI International |
| Waste Connections |
TFI International and Waste Connections Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TFI International and Waste Connections
The main advantage of trading using opposite TFI International and Waste Connections positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TFI International position performs unexpectedly, Waste Connections 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 Waste Connections will offset losses from the drop in Waste Connections' long position.| TFI International vs. WSP Global | TFI International vs. Waste Connections | TFI International vs. Open Text Corp | TFI International vs. Cargojet |
| Waste Connections vs. Thomson Reuters Corp | Waste Connections vs. TFI International | Waste Connections vs. CCL Industries | Waste Connections vs. Open Text Corp |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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