Correlation Between TFI International and Nano Nuclear

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

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

Diversification Opportunities for TFI International and Nano Nuclear

0.03

Correlation Coefficient

TFI International  Nano Nuclear

Significant diversification

The 3 months correlation between TFI and Nano is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding TFI International and Nano Nuclear Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nano Nuclear Energy 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 Nano Nuclear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nano Nuclear Energy has no effect on the direction of TFI International i.e., TFI International and Nano Nuclear go up and down completely randomly.

Pair Corralation between TFI International and Nano Nuclear

Given the investment horizon of 90 days TFI International is expected to under-perform the Nano Nuclear. But the stock apears to be less risky and, when comparing its historical volatility, TFI International is 2.76 times less risky than Nano Nuclear. The stock trades about -0.27 of its potential returns per unit of risk. The Nano Nuclear Energy is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2,373  in Nano Nuclear Energy on December 18, 2024 and sell it today you would earn a total of  688.00  from holding Nano Nuclear Energy or generate 28.99% return on investment over 90 days.

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

TFI International  vs.  Nano Nuclear Energy

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.

Nano Nuclear Energy

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nano Nuclear Energy are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Nano Nuclear exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TFI International and Nano Nuclear

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

The idea behind TFI International and Nano Nuclear Energy 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.