Correlation Between TFI International and HomesToLife
Can any of the company-specific risk be diversified away by investing in both TFI International and HomesToLife 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 HomesToLife into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TFI International and HomesToLife, you can compare the effects of market volatilities on TFI International and HomesToLife 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 HomesToLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of TFI International and HomesToLife.
Diversification Opportunities for TFI International and HomesToLife
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TFI and HomesToLife is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding TFI International and HomesToLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HomesToLife 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 HomesToLife. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HomesToLife has no effect on the direction of TFI International i.e., TFI International and HomesToLife go up and down completely randomly.
Pair Corralation between TFI International and HomesToLife
Given the investment horizon of 90 days TFI International is expected to generate 0.2 times more return on investment than HomesToLife. However, TFI International is 5.01 times less risky than HomesToLife. It trades about 0.16 of its potential returns per unit of risk. HomesToLife is currently generating about 0.0 per unit of risk. If you would invest 13,323 in TFI International on September 5, 2024 and sell it today you would earn a total of 1,918 from holding TFI International or generate 14.4% 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. HomesToLife
Performance |
| Timeline |
| TFI International |
| HomesToLife |
TFI International and HomesToLife Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TFI International and HomesToLife
The main advantage of trading using opposite TFI International and HomesToLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TFI International position performs unexpectedly, HomesToLife 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 HomesToLife will offset losses from the drop in HomesToLife's long position.| TFI International vs. Old Dominion Freight | TFI International vs. ArcBest Corp | TFI International vs. Marten Transport | TFI International vs. Werner Enterprises |
| HomesToLife vs. Analog Devices | HomesToLife vs. TFI International | HomesToLife vs. Hafnia Limited | HomesToLife vs. Ultra Clean Holdings |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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