Correlation Between TFI International and Kinaxis

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

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

Diversification Opportunities for TFI International and Kinaxis

0.89

Correlation Coefficient

TFI International  Kinaxis

Very poor diversification

The 3 months correlation between TFI and Kinaxis is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding TFI International and Kinaxis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinaxis 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 Kinaxis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinaxis has no effect on the direction of TFI International i.e., TFI International and Kinaxis go up and down completely randomly.

Pair Corralation between TFI International and Kinaxis

Assuming the 90 days trading horizon TFI International is expected to under-perform the Kinaxis. In addition to that, TFI International is 1.92 times more volatile than Kinaxis. It trades about -0.26 of its total potential returns per unit of risk. Kinaxis is currently generating about -0.1 per unit of volatility. If you would invest  17,371  in Kinaxis on December 30, 2024 and sell it today you would lose (1,847) from holding Kinaxis or give up 10.63% 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.  Kinaxis

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.

Kinaxis

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kinaxis has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with TFI International and Kinaxis

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

The idea behind TFI International and Kinaxis 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.