Correlation Between TFI International and National CineMedia
Can any of the company-specific risk be diversified away by investing in both TFI International and National CineMedia 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 National CineMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TFI International and National CineMedia, you can compare the effects of market volatilities on TFI International and National CineMedia 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 National CineMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of TFI International and National CineMedia.
Diversification Opportunities for TFI International and National CineMedia
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between TFI and National is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding TFI International and National CineMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National CineMedia 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 National CineMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National CineMedia has no effect on the direction of TFI International i.e., TFI International and National CineMedia go up and down completely randomly.
Pair Corralation between TFI International and National CineMedia
Given the investment horizon of 90 days TFI International is expected to generate 0.86 times more return on investment than National CineMedia. However, TFI International is 1.16 times less risky than National CineMedia. It trades about 0.1 of its potential returns per unit of risk. National CineMedia is currently generating about -0.04 per unit of risk. If you would invest 13,746 in TFI International on August 28, 2024 and sell it today you would earn a total of 1,177 from holding TFI International or generate 8.56% 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. National CineMedia
Performance |
| Timeline |
| TFI International |
| National CineMedia |
TFI International and National CineMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TFI International and National CineMedia
The main advantage of trading using opposite TFI International and National CineMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TFI International position performs unexpectedly, National CineMedia 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 National CineMedia will offset losses from the drop in National CineMedia's long position.| TFI International vs. Old Dominion Freight | TFI International vs. ArcBest Corp | TFI International vs. Marten Transport | TFI International vs. Werner Enterprises |
| National CineMedia vs. MGO Global Common | National CineMedia vs. Baosheng Media Group | National CineMedia vs. Impact Fusion International | National CineMedia vs. ZW Data Action |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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