Correlation Between TFI International and International Media
Can any of the company-specific risk be diversified away by investing in both TFI International and International Media 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 International Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TFI International and International Media Acquisition, you can compare the effects of market volatilities on TFI International and International Media 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 International Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of TFI International and International Media.
Diversification Opportunities for TFI International and International Media
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between TFI and International is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding TFI International and International Media Acquisitio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Media 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 International Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Media has no effect on the direction of TFI International i.e., TFI International and International Media go up and down completely randomly.
Pair Corralation between TFI International and International Media
Given the investment horizon of 90 days TFI International is expected to generate 59.3 times less return on investment than International Media. But when comparing it to its historical volatility, TFI International is 36.19 times less risky than International Media. It trades about 0.05 of its potential returns per unit of risk. International Media Acquisition is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 7.50 in International Media Acquisition on September 3, 2024 and sell it today you would lose (1.50) from holding International Media Acquisition or give up 20.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 45.86% |
| Values | Daily Returns |
TFI International vs. International Media Acquisitio
Performance |
| Timeline |
| TFI International |
| International Media |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
TFI International and International Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TFI International and International Media
The main advantage of trading using opposite TFI International and International Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TFI International position performs unexpectedly, International Media 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 International Media will offset losses from the drop in International Media's long position.| TFI International vs. Old Dominion Freight | TFI International vs. ArcBest Corp | TFI International vs. Marten Transport | TFI International vs. Werner Enterprises |
| International Media vs. Saia Inc | International Media vs. Western Digital | International Media vs. Radcom | International Media vs. TFI International |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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