Correlation Between TFI International and Victura Construction

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

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

Diversification Opportunities for TFI International and Victura Construction

0.0

Correlation Coefficient

TFI International  Victura Construction

Pay attention - limited upside

The 3 months correlation between TFI and Victura is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TFI International and Victura Construction Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victura Construction 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 Victura Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victura Construction has no effect on the direction of TFI International i.e., TFI International and Victura Construction go up and down completely randomly.

Pair Corralation between TFI International and Victura Construction

Given the investment horizon of 90 days TFI International is expected to generate 26.65 times less return on investment than Victura Construction. But when comparing it to its historical volatility, TFI International is 35.19 times less risky than Victura Construction. It trades about 0.07 of its potential returns per unit of risk. Victura Construction Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Victura Construction Group on September 14, 2024 and sell it today you would lose (0.01) from holding Victura Construction Group or give up 90.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.63%
Values	Daily Returns

TFI International  vs.  Victura Construction Group

TFI International

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in TFI International are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting forward indicators, TFI International may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Victura Construction

Risk-Adjusted Performance

9 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Victura Construction Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively sluggish fundamental indicators, Victura Construction unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TFI International and Victura Construction

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

The idea behind TFI International and Victura Construction Group 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.

Check out your portfolio center.

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.