Correlation Between TFI International and Sun Country
Can any of the company-specific risk be diversified away by investing in both TFI International and Sun Country 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 Sun Country into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TFI International and Sun Country Airlines, you can compare the effects of market volatilities on TFI International and Sun Country 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 Sun Country. Check out your portfolio center. Please also check ongoing floating volatility patterns of TFI International and Sun Country.
Diversification Opportunities for TFI International and Sun Country
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between TFI and Sun is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding TFI International and Sun Country Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Country Airlines 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 Sun Country. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Country Airlines has no effect on the direction of TFI International i.e., TFI International and Sun Country go up and down completely randomly.
Pair Corralation between TFI International and Sun Country
Given the investment horizon of 90 days TFI International is expected to generate 0.64 times more return on investment than Sun Country. However, TFI International is 1.57 times less risky than Sun Country. It trades about 0.22 of its potential returns per unit of risk. Sun Country Airlines is currently generating about 0.12 per unit of risk. If you would invest 13,168 in TFI International on August 24, 2024 and sell it today you would earn a total of 1,636 from holding TFI International or generate 12.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TFI International vs. Sun Country Airlines
Performance |
| Timeline |
| TFI International |
| Sun Country Airlines |
TFI International and Sun Country Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TFI International and Sun Country
The main advantage of trading using opposite TFI International and Sun Country positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TFI International position performs unexpectedly, Sun Country 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 Sun Country will offset losses from the drop in Sun Country's long position.| TFI International vs. Old Dominion Freight | TFI International vs. ArcBest Corp | TFI International vs. Marten Transport | TFI International vs. Werner Enterprises |
| Sun Country vs. Spirit Airlines | Sun Country vs. JetBlue Airways Corp | Sun Country vs. Allegiant Travel | Sun Country vs. Copa Holdings SA |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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