Correlation Between TFI International and Barrick Gold

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Can any of the company-specific risk be diversified away by investing in both TFI International and Barrick Gold 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 Barrick Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TFI International and Barrick Gold Corp, you can compare the effects of market volatilities on TFI International and Barrick Gold 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 Barrick Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of TFI International and Barrick Gold.

Diversification Opportunities for TFI International and Barrick Gold

-0.54
  Correlation Coefficient

Excellent diversification

The 3 months correlation between TFI and Barrick is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding TFI International and Barrick Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrick Gold Corp 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 Barrick Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrick Gold Corp has no effect on the direction of TFI International i.e., TFI International and Barrick Gold go up and down completely randomly.

Pair Corralation between TFI International and Barrick Gold

Given the investment horizon of 90 days TFI International is expected to generate 0.83 times more return on investment than Barrick Gold. However, TFI International is 1.2 times less risky than Barrick Gold. It trades about 0.07 of its potential returns per unit of risk. Barrick Gold Corp is currently generating about 0.02 per unit of risk. If you would invest  11,435  in TFI International on September 5, 2024 and sell it today you would earn a total of  3,806  from holding TFI International or generate 33.28% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

TFI International  vs.  Barrick Gold Corp

 Performance 
       Timeline  
TFI International 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in TFI International are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting forward indicators, TFI International may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Barrick Gold Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Barrick Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's essential indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

TFI International and Barrick Gold Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with TFI International and Barrick Gold

The main advantage of trading using opposite TFI International and Barrick Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TFI International position performs unexpectedly, Barrick Gold 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 Barrick Gold will offset losses from the drop in Barrick Gold's long position.
The idea behind TFI International and Barrick Gold Corp 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 Valuation module to check real value of public entities based on technical and fundamental data.

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