Correlation Between TFI International and NCR Voyix

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

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

Diversification Opportunities for TFI International and NCR Voyix

0.81

Correlation Coefficient

TFI International  NCR Voyix

Very poor diversification

The 3 months correlation between TFI and NCR is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding TFI International and NCR Voyix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NCR Voyix 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 NCR Voyix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NCR Voyix has no effect on the direction of TFI International i.e., TFI International and NCR Voyix go up and down completely randomly.

Pair Corralation between TFI International and NCR Voyix

Given the investment horizon of 90 days TFI International is expected to generate 1.91 times less return on investment than NCR Voyix. In addition to that, TFI International is 1.01 times more volatile than NCR Voyix. It trades about 0.04 of its total potential returns per unit of risk. NCR Voyix is currently generating about 0.07 per unit of volatility. If you would invest  1,389  in NCR Voyix on September 17, 2024 and sell it today you would earn a total of  110.50  from holding NCR Voyix or generate 7.96% return on investment over 90 days.

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

TFI International  vs.  NCR Voyix

TFI International

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TFI International are ranked lower than 2 (%) 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.

NCR Voyix

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NCR Voyix are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, NCR Voyix may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with TFI International and NCR Voyix

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

The idea behind TFI International and NCR Voyix 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .