Correlation Between TFI International and Delek Logistics

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both TFI International and Delek Logistics 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 Delek Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TFI International and Delek Logistics Partners, you can compare the effects of market volatilities on TFI International and Delek Logistics 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 Delek Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of TFI International and Delek Logistics.

Diversification Opportunities for TFI International and Delek Logistics

0.05
  Correlation Coefficient

Significant diversification

The 3 months correlation between TFI and Delek is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding TFI International and Delek Logistics Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delek Logistics Partners 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 Delek Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delek Logistics Partners has no effect on the direction of TFI International i.e., TFI International and Delek Logistics go up and down completely randomly.

Pair Corralation between TFI International and Delek Logistics

Given the investment horizon of 90 days TFI International is expected to generate 0.93 times more return on investment than Delek Logistics. However, TFI International is 1.07 times less risky than Delek Logistics. It trades about 0.05 of its potential returns per unit of risk. Delek Logistics Partners is currently generating about 0.01 per unit of risk. If you would invest  9,958  in TFI International on August 24, 2024 and sell it today you would earn a total of  4,915  from holding TFI International or generate 49.36% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

TFI International  vs.  Delek Logistics Partners

 Performance 
       Timeline  
TFI International 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days TFI International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, TFI International is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.
Delek Logistics Partners 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Delek Logistics Partners are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent forward-looking signals, Delek Logistics may actually be approaching a critical reversion point that can send shares even higher in December 2024.

TFI International and Delek Logistics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with TFI International and Delek Logistics

The main advantage of trading using opposite TFI International and Delek Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TFI International position performs unexpectedly, Delek Logistics 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 Delek Logistics will offset losses from the drop in Delek Logistics' long position.
The idea behind TFI International and Delek Logistics Partners pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

Other Complementary Tools

Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
USA ETFs
Find actively traded Exchange Traded Funds (ETF) in USA
Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets