Correlation Between Proficient Auto and TFI International

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

By analyzing existing cross correlation between Proficient Auto Logistics, and TFI International, you can compare the effects of market volatilities on Proficient Auto and TFI International 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 Proficient Auto with a short position of TFI International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Proficient Auto and TFI International.

Diversification Opportunities for Proficient Auto and TFI International

-0.06

Correlation Coefficient

Proficient Auto  TFI International

Good diversification

The 3 months correlation between Proficient and TFI is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Proficient Auto Logistics, and TFI International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TFI International and Proficient Auto 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 Proficient Auto Logistics, are associated (or correlated) with TFI International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TFI International has no effect on the direction of Proficient Auto i.e., Proficient Auto and TFI International go up and down completely randomly.

Pair Corralation between Proficient Auto and TFI International

Considering the 90-day investment horizon Proficient Auto Logistics, is expected to under-perform the TFI International. In addition to that, Proficient Auto is 1.89 times more volatile than TFI International. It trades about -0.13 of its total potential returns per unit of risk. TFI International is currently generating about 0.19 per unit of volatility. If you would invest  14,346  in TFI International on September 19, 2024 and sell it today you would earn a total of  639.00  from holding TFI International or generate 4.45% return on investment over 90 days.

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

Proficient Auto Logistics,  vs.  TFI International

Proficient Auto Logi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Proficient Auto Logistics, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

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.

Pair Trading with Proficient Auto and TFI International

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

The idea behind Proficient Auto Logistics, and TFI International 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.