Correlation Between Schneider National and TFI International

Can any of the company-specific risk be diversified away by investing in both Schneider National and TFI International 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 Schneider National and TFI International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Schneider National and TFI International, you can compare the effects of market volatilities on Schneider National and TFI International 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 Schneider National with a short position of TFI International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schneider National and TFI International.

Diversification Opportunities for Schneider National and TFI International

0.83

Correlation Coefficient

Schneider National  TFI International

Very poor diversification

The 3 months correlation between Schneider and TFI is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Schneider National and TFI International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TFI International and Schneider National 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 Schneider National are associated (or correlated) with TFI International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TFI International has no effect on the direction of Schneider National i.e., Schneider National and TFI International go up and down completely randomly.

Pair Corralation between Schneider National and TFI International

Given the investment horizon of 90 days Schneider National is expected to under-perform the TFI International. In addition to that, Schneider National is 1.2 times more volatile than TFI International. It trades about -0.28 of its total potential returns per unit of risk. TFI International is currently generating about -0.26 per unit of volatility. If you would invest  14,983  in TFI International on September 24, 2024 and sell it today you would lose (1,108) from holding TFI International or give up 7.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Schneider National  vs.  TFI International

Schneider National

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Schneider National are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, Schneider National is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

TFI International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TFI International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, TFI International is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Schneider National and TFI International

The main advantage of trading using opposite Schneider National and TFI International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schneider National position performs unexpectedly, TFI International 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 TFI International will offset losses from the drop in TFI International's long position.

The idea behind Schneider National and TFI International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.