Correlation Between RF Acquisition and TFI International

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

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

Diversification Opportunities for RF Acquisition and TFI International

-0.86

Correlation Coefficient

RF Acquisition  TFI International

Pay attention - limited upside

The 3 months correlation between RFAIR and TFI is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding RF Acquisition Corp and TFI International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TFI International and RF Acquisition 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 RF Acquisition Corp 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 RF Acquisition i.e., RF Acquisition and TFI International go up and down completely randomly.

Pair Corralation between RF Acquisition and TFI International

Assuming the 90 days horizon RF Acquisition Corp is expected to generate 1.69 times more return on investment than TFI International. However, RF Acquisition is 1.69 times more volatile than TFI International. It trades about 0.08 of its potential returns per unit of risk. TFI International is currently generating about -0.29 per unit of risk. If you would invest  6.50  in RF Acquisition Corp on December 17, 2024 and sell it today you would earn a total of  1.00  from holding RF Acquisition Corp or generate 15.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	80.0%
Values	Daily Returns

RF Acquisition Corp  vs.  TFI International

RF Acquisition Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in RF Acquisition Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent forward indicators, RF Acquisition reported solid returns over the last few months and may actually be approaching a breakup point.

TFI International

Risk-Adjusted Performance

Very Weak

Over the last 90 days TFI International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with RF Acquisition and TFI International

The main advantage of trading using opposite RF Acquisition and TFI International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RF Acquisition 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 RF Acquisition Corp 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.