Correlation Between TFI International and Carson Development

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

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

Diversification Opportunities for TFI International and Carson Development

0.0

Correlation Coefficient

TFI International  Carson Development

Pay attention - limited upside

The 3 months correlation between TFI and Carson is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TFI International and Carson Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carson Development 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 Carson Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carson Development has no effect on the direction of TFI International i.e., TFI International and Carson Development go up and down completely randomly.

Pair Corralation between TFI International and Carson Development

If you would invest  13,615  in TFI International on September 26, 2024 and sell it today you would earn a total of  520.00  from holding TFI International or generate 3.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	2.44%
Values	Daily Returns

TFI International  vs.  Carson Development

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.

Carson Development

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Carson Development has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Carson Development is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with TFI International and Carson Development

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

The idea behind TFI International and Carson Development 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.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.