Correlation Between TFI International and Uranium Energy

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

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

Diversification Opportunities for TFI International and Uranium Energy

0.36

Correlation Coefficient

TFI International  Uranium Energy

Weak diversification

The 3 months correlation between TFI and Uranium is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding TFI International and Uranium Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uranium Energy 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 Uranium Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uranium Energy Corp has no effect on the direction of TFI International i.e., TFI International and Uranium Energy go up and down completely randomly.

Pair Corralation between TFI International and Uranium Energy

Given the investment horizon of 90 days TFI International is expected to under-perform the Uranium Energy. But the stock apears to be less risky and, when comparing its historical volatility, TFI International is 1.84 times less risky than Uranium Energy. The stock trades about 0.0 of its potential returns per unit of risk. The Uranium Energy Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  643.00  in Uranium Energy Corp on September 25, 2024 and sell it today you would earn a total of  71.00  from holding Uranium Energy Corp or generate 11.04% return on investment over 90 days.

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

TFI International  vs.  Uranium Energy Corp

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.

Uranium Energy Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Uranium Energy Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sluggish technical and fundamental indicators, Uranium Energy exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TFI International and Uranium Energy

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

The idea behind TFI International and Uranium Energy 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.

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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.