Correlation Between TFI International and Minerals Technologies
Can any of the company-specific risk be diversified away by investing in both TFI International and Minerals Technologies 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 Minerals Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TFI International and Minerals Technologies, you can compare the effects of market volatilities on TFI International and Minerals Technologies 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 Minerals Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of TFI International and Minerals Technologies.
Diversification Opportunities for TFI International and Minerals Technologies
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TFI and Minerals is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding TFI International and Minerals Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Minerals Technologies 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 Minerals Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Minerals Technologies has no effect on the direction of TFI International i.e., TFI International and Minerals Technologies go up and down completely randomly.
Pair Corralation between TFI International and Minerals Technologies
Given the investment horizon of 90 days TFI International is expected to generate 0.87 times more return on investment than Minerals Technologies. However, TFI International is 1.16 times less risky than Minerals Technologies. It trades about 0.13 of its potential returns per unit of risk. Minerals Technologies is currently generating about -0.09 per unit of risk. If you would invest 14,796 in TFI International on September 14, 2024 and sell it today you would earn a total of 456.00 from holding TFI International or generate 3.08% 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. Minerals Technologies
Performance |
| Timeline |
| TFI International |
| Minerals Technologies |
TFI International and Minerals Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TFI International and Minerals Technologies
The main advantage of trading using opposite TFI International and Minerals Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TFI International position performs unexpectedly, Minerals Technologies 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 Minerals Technologies will offset losses from the drop in Minerals Technologies' long position.| TFI International vs. Old Dominion Freight | TFI International vs. ArcBest Corp | TFI International vs. Marten Transport | TFI International vs. Werner Enterprises |
| Minerals Technologies vs. LyondellBasell Industries NV | Minerals Technologies vs. International Flavors Fragrances | Minerals Technologies vs. Cabot | Minerals Technologies vs. Westlake Chemical |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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