Correlation Between TFI International and Dye Durham

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

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

Diversification Opportunities for TFI International and Dye Durham

0.81

Correlation Coefficient

TFI International  Dye Durham

Very poor diversification

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

Pair Corralation between TFI International and Dye Durham

Assuming the 90 days trading horizon TFI International is expected to under-perform the Dye Durham. But the stock apears to be less risky and, when comparing its historical volatility, TFI International is 1.31 times less risky than Dye Durham. The stock trades about -0.26 of its potential returns per unit of risk. The Dye Durham is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest  1,680  in Dye Durham on December 28, 2024 and sell it today you would lose (547.00) from holding Dye Durham or give up 32.56% of portfolio value over 90 days.

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

TFI International  vs.  Dye Durham

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. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Dye Durham

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dye Durham has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with TFI International and Dye Durham

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

The idea behind TFI International and Dye Durham 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.