Correlation Between TFI International and OmniAb

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

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

Diversification Opportunities for TFI International and OmniAb

-0.75

Correlation Coefficient

TFI International  OmniAb

Pay attention - limited upside

The 3 months correlation between TFI and OmniAb is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding TFI International and OmniAb Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OmniAb Inc 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 OmniAb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OmniAb Inc has no effect on the direction of TFI International i.e., TFI International and OmniAb go up and down completely randomly.

Pair Corralation between TFI International and OmniAb

Given the investment horizon of 90 days TFI International is expected to under-perform the OmniAb. But the stock apears to be less risky and, when comparing its historical volatility, TFI International is 4.94 times less risky than OmniAb. The stock trades about -0.24 of its potential returns per unit of risk. The OmniAb Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  34.00  in OmniAb Inc on December 27, 2024 and sell it today you would lose (3.00) from holding OmniAb Inc or give up 8.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	62.3%
Values	Daily Returns

TFI International  vs.  OmniAb Inc

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.

OmniAb Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in OmniAb Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain forward indicators, OmniAb showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TFI International and OmniAb

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

The idea behind TFI International and OmniAb Inc 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.