Correlation Between TFI International and Biodexa Pharmaceticals

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

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

Diversification Opportunities for TFI International and Biodexa Pharmaceticals

0.84

Correlation Coefficient

TFI International  Biodexa Pharmaceticals

Very poor diversification

The 3 months correlation between TFI and Biodexa is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding TFI International and Biodexa Pharmaceticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biodexa Pharmaceticals 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 Biodexa Pharmaceticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biodexa Pharmaceticals has no effect on the direction of TFI International i.e., TFI International and Biodexa Pharmaceticals go up and down completely randomly.

Pair Corralation between TFI International and Biodexa Pharmaceticals

Given the investment horizon of 90 days TFI International is expected to under-perform the Biodexa Pharmaceticals. But the stock apears to be less risky and, when comparing its historical volatility, TFI International is 2.37 times less risky than Biodexa Pharmaceticals. The stock trades about -0.25 of its potential returns per unit of risk. The Biodexa Pharmaceticals is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  399.00  in Biodexa Pharmaceticals on December 20, 2024 and sell it today you would lose (165.00) from holding Biodexa Pharmaceticals or give up 41.35% 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.  Biodexa Pharmaceticals

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.

Biodexa Pharmaceticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Biodexa Pharmaceticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with TFI International and Biodexa Pharmaceticals

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

The idea behind TFI International and Biodexa Pharmaceticals 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.