Correlation Between TFI International and Academy Sports
Can any of the company-specific risk be diversified away by investing in both TFI International and Academy Sports 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 Academy Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TFI International and Academy Sports Outdoors, you can compare the effects of market volatilities on TFI International and Academy Sports 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 Academy Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of TFI International and Academy Sports.
Diversification Opportunities for TFI International and Academy Sports
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between TFI and Academy is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding TFI International and Academy Sports Outdoors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Academy Sports Outdoors 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 Academy Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Academy Sports Outdoors has no effect on the direction of TFI International i.e., TFI International and Academy Sports go up and down completely randomly.
Pair Corralation between TFI International and Academy Sports
Given the investment horizon of 90 days TFI International is expected to generate 1.42 times more return on investment than Academy Sports. However, TFI International is 1.42 times more volatile than Academy Sports Outdoors. It trades about 0.18 of its potential returns per unit of risk. Academy Sports Outdoors is currently generating about -0.3 per unit of risk. If you would invest 13,615 in TFI International on August 27, 2024 and sell it today you would earn a total of 1,258 from holding TFI International or generate 9.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TFI International vs. Academy Sports Outdoors
Performance |
| Timeline |
| TFI International |
| Academy Sports Outdoors |
TFI International and Academy Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TFI International and Academy Sports
The main advantage of trading using opposite TFI International and Academy Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TFI International position performs unexpectedly, Academy Sports 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 Academy Sports will offset losses from the drop in Academy Sports' long position.| TFI International vs. Old Dominion Freight | TFI International vs. ArcBest Corp | TFI International vs. Knight Transportation | TFI International vs. Universal Logistics Holdings |
| Academy Sports vs. Oriental Culture Holding | Academy Sports vs. Hour Loop | Academy Sports vs. Qurate Retail Series | Academy Sports vs. Emerge Commerce |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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