Correlation Between TFI International and Usio

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

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

Diversification Opportunities for TFI International and Usio

0.42

Correlation Coefficient

TFI International  Usio

Very weak diversification

The 3 months correlation between TFI and Usio is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding TFI International and Usio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Usio 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 Usio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Usio Inc has no effect on the direction of TFI International i.e., TFI International and Usio go up and down completely randomly.

Pair Corralation between TFI International and Usio

Given the investment horizon of 90 days TFI International is expected to generate 0.55 times more return on investment than Usio. However, TFI International is 1.83 times less risky than Usio. It trades about 0.05 of its potential returns per unit of risk. Usio Inc is currently generating about 0.01 per unit of risk. If you would invest  9,760  in TFI International on September 26, 2024 and sell it today you would earn a total of  4,375  from holding TFI International or generate 44.83% return on investment over 90 days.

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

TFI International  vs.  Usio Inc

TFI International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TFI International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, TFI International is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Usio Inc

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Usio Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Usio is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with TFI International and Usio

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

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