Correlation Between TFI International and Marfrig Global
Can any of the company-specific risk be diversified away by investing in both TFI International and Marfrig Global 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 Marfrig Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TFI International and Marfrig Global Foods, you can compare the effects of market volatilities on TFI International and Marfrig Global 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 Marfrig Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of TFI International and Marfrig Global.
Diversification Opportunities for TFI International and Marfrig Global
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TFI and Marfrig is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding TFI International and Marfrig Global Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marfrig Global Foods 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 Marfrig Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marfrig Global Foods has no effect on the direction of TFI International i.e., TFI International and Marfrig Global go up and down completely randomly.
Pair Corralation between TFI International and Marfrig Global
Given the investment horizon of 90 days TFI International is expected to generate 4.11 times less return on investment than Marfrig Global. But when comparing it to its historical volatility, TFI International is 2.51 times less risky than Marfrig Global. It trades about 0.18 of its potential returns per unit of risk. Marfrig Global Foods is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 274.00 in Marfrig Global Foods on September 13, 2024 and sell it today you would earn a total of 49.00 from holding Marfrig Global Foods or generate 17.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
TFI International vs. Marfrig Global Foods
Performance |
| Timeline |
| TFI International |
| Marfrig Global Foods |
TFI International and Marfrig Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TFI International and Marfrig Global
The main advantage of trading using opposite TFI International and Marfrig Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TFI International position performs unexpectedly, Marfrig Global 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 Marfrig Global will offset losses from the drop in Marfrig Global's long position.| TFI International vs. Old Dominion Freight | TFI International vs. ArcBest Corp | TFI International vs. Marten Transport | TFI International vs. Werner Enterprises |
| Marfrig Global vs. BRF SA ADR | Marfrig Global vs. Pilgrims Pride Corp | Marfrig Global vs. John B Sanfilippo | Marfrig Global vs. Seneca Foods Corp |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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