Correlation Between TFI International and United Guardian
Can any of the company-specific risk be diversified away by investing in both TFI International and United Guardian 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 United Guardian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TFI International and United Guardian, you can compare the effects of market volatilities on TFI International and United Guardian 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 United Guardian. Check out your portfolio center. Please also check ongoing floating volatility patterns of TFI International and United Guardian.
Diversification Opportunities for TFI International and United Guardian
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TFI and United is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding TFI International and United Guardian in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Guardian 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 United Guardian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Guardian has no effect on the direction of TFI International i.e., TFI International and United Guardian go up and down completely randomly.
Pair Corralation between TFI International and United Guardian
Given the investment horizon of 90 days TFI International is expected to generate 0.72 times more return on investment than United Guardian. However, TFI International is 1.39 times less risky than United Guardian. It trades about 0.18 of its potential returns per unit of risk. United Guardian is currently generating about -0.43 per unit of risk. If you would invest 13,615 in TFI International on August 27, 2024 and sell it today you would earn a total of 1,258 from holding TFI International or generate 9.24% 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. United Guardian
Performance |
| Timeline |
| TFI International |
| United Guardian |
TFI International and United Guardian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TFI International and United Guardian
The main advantage of trading using opposite TFI International and United Guardian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TFI International position performs unexpectedly, United Guardian 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 United Guardian will offset losses from the drop in United Guardian's long position.| TFI International vs. Old Dominion Freight | TFI International vs. ArcBest Corp | TFI International vs. Knight Transportation | TFI International vs. Universal Logistics Holdings |
| United Guardian vs. Utah Medical Products | United Guardian vs. Union Bankshares | United Guardian vs. Psychemedics | United Guardian vs. Unity Bancorp |
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 CEOs Directory module to screen CEOs from public companies around the world.
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