Correlation Between TFI International and Kinsale Capital
Can any of the company-specific risk be diversified away by investing in both TFI International and Kinsale Capital 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 Kinsale Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TFI International and Kinsale Capital Group, you can compare the effects of market volatilities on TFI International and Kinsale Capital 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 Kinsale Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of TFI International and Kinsale Capital.
Diversification Opportunities for TFI International and Kinsale Capital
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TFI and Kinsale is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding TFI International and Kinsale Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinsale Capital Group 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 Kinsale Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinsale Capital Group has no effect on the direction of TFI International i.e., TFI International and Kinsale Capital go up and down completely randomly.
Pair Corralation between TFI International and Kinsale Capital
Given the investment horizon of 90 days TFI International is expected to generate 1.63 times less return on investment than Kinsale Capital. But when comparing it to its historical volatility, TFI International is 1.45 times less risky than Kinsale Capital. It trades about 0.07 of its potential returns per unit of risk. Kinsale Capital Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 32,853 in Kinsale Capital Group on September 2, 2024 and sell it today you would earn a total of 17,991 from holding Kinsale Capital Group or generate 54.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TFI International vs. Kinsale Capital Group
Performance |
| Timeline |
| TFI International |
| Kinsale Capital Group |
TFI International and Kinsale Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TFI International and Kinsale Capital
The main advantage of trading using opposite TFI International and Kinsale Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TFI International position performs unexpectedly, Kinsale Capital 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 Kinsale Capital will offset losses from the drop in Kinsale Capital's long position.| TFI International vs. Old Dominion Freight | TFI International vs. ArcBest Corp | TFI International vs. Marten Transport | TFI International vs. Werner Enterprises |
| Kinsale Capital vs. Selective Insurance Group | Kinsale Capital vs. Horace Mann Educators | Kinsale Capital vs. Kemper | Kinsale Capital vs. ProAssurance |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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