Correlation Between TFI International and AMCON Distributing
Can any of the company-specific risk be diversified away by investing in both TFI International and AMCON Distributing 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 AMCON Distributing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TFI International and AMCON Distributing, you can compare the effects of market volatilities on TFI International and AMCON Distributing 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 AMCON Distributing. Check out your portfolio center. Please also check ongoing floating volatility patterns of TFI International and AMCON Distributing.
Diversification Opportunities for TFI International and AMCON Distributing
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between TFI and AMCON is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding TFI International and AMCON Distributing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMCON Distributing 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 AMCON Distributing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMCON Distributing has no effect on the direction of TFI International i.e., TFI International and AMCON Distributing go up and down completely randomly.
Pair Corralation between TFI International and AMCON Distributing
Given the investment horizon of 90 days TFI International is expected to generate 3.13 times less return on investment than AMCON Distributing. But when comparing it to its historical volatility, TFI International is 3.82 times less risky than AMCON Distributing. It trades about 0.18 of its potential returns per unit of risk. AMCON Distributing is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 12,100 in AMCON Distributing on September 13, 2024 and sell it today you would earn a total of 1,513 from holding AMCON Distributing or generate 12.5% 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. AMCON Distributing
Performance |
| Timeline |
| TFI International |
| AMCON Distributing |
TFI International and AMCON Distributing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TFI International and AMCON Distributing
The main advantage of trading using opposite TFI International and AMCON Distributing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TFI International position performs unexpectedly, AMCON Distributing 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 AMCON Distributing will offset losses from the drop in AMCON Distributing's long position.| TFI International vs. Old Dominion Freight | TFI International vs. ArcBest Corp | TFI International vs. Marten Transport | TFI International vs. Werner Enterprises |
| AMCON Distributing vs. Steven Madden | AMCON Distributing vs. Vera Bradley | AMCON Distributing vs. Caleres | AMCON Distributing vs. Wolverine World Wide |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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