Correlation Between TFI International and Cistera Networks

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

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

Diversification Opportunities for TFI International and Cistera Networks

0.0

Correlation Coefficient

TFI International  Cistera Networks

Pay attention - limited upside

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

Pair Corralation between TFI International and Cistera Networks

Given the investment horizon of 90 days TFI International is expected to generate 41.4 times less return on investment than Cistera Networks. But when comparing it to its historical volatility, TFI International is 34.55 times less risky than Cistera Networks. It trades about 0.05 of its potential returns per unit of risk. Cistera Networks is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  0.02  in Cistera Networks on September 3, 2024 and sell it today you would lose (0.01) from holding Cistera Networks or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	93.74%
Values	Daily Returns

TFI International  vs.  Cistera Networks

TFI International

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in TFI International are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, TFI International is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Cistera Networks

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cistera Networks has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Cistera Networks is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with TFI International and Cistera Networks

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

The idea behind TFI International and Cistera Networks 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.