Correlation Between TFI International and Centerra Gold
Can any of the company-specific risk be diversified away by investing in both TFI International and Centerra Gold 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 Centerra Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TFI International and Centerra Gold, you can compare the effects of market volatilities on TFI International and Centerra Gold 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 Centerra Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of TFI International and Centerra Gold.
Diversification Opportunities for TFI International and Centerra Gold
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TFI and Centerra is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding TFI International and Centerra Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centerra Gold 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 Centerra Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centerra Gold has no effect on the direction of TFI International i.e., TFI International and Centerra Gold go up and down completely randomly.
Pair Corralation between TFI International and Centerra Gold
Given the investment horizon of 90 days TFI International is expected to generate 0.92 times more return on investment than Centerra Gold. However, TFI International is 1.09 times less risky than Centerra Gold. It trades about 0.18 of its potential returns per unit of risk. Centerra Gold is currently generating about -0.21 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TFI International vs. Centerra Gold
Performance |
| Timeline |
| TFI International |
| Centerra Gold |
TFI International and Centerra Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TFI International and Centerra Gold
The main advantage of trading using opposite TFI International and Centerra Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TFI International position performs unexpectedly, Centerra Gold 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 Centerra Gold will offset losses from the drop in Centerra Gold's long position.| TFI International vs. Old Dominion Freight | TFI International vs. ArcBest Corp | TFI International vs. Knight Transportation | TFI International vs. Universal Logistics Holdings |
| Centerra Gold vs. Gold Fields Ltd | Centerra Gold vs. Eldorado Gold Corp | Centerra Gold vs. Osisko Gold Ro | Centerra Gold vs. SSR Mining |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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