Correlation Between CONSOLIDATED and TFI International

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

By analyzing existing cross correlation between CONSOLIDATED EDISON N and TFI International, you can compare the effects of market volatilities on CONSOLIDATED and TFI International 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 CONSOLIDATED with a short position of TFI International. Check out your portfolio center. Please also check ongoing floating volatility patterns of CONSOLIDATED and TFI International.

Diversification Opportunities for CONSOLIDATED and TFI International

-0.48

Correlation Coefficient

CONSOLIDATED  TFI International

Very good diversification

The 3 months correlation between CONSOLIDATED and TFI is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding CONSOLIDATED EDISON N and TFI International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TFI International and CONSOLIDATED 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 CONSOLIDATED EDISON N are associated (or correlated) with TFI International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TFI International has no effect on the direction of CONSOLIDATED i.e., CONSOLIDATED and TFI International go up and down completely randomly.

Pair Corralation between CONSOLIDATED and TFI International

Assuming the 90 days trading horizon CONSOLIDATED is expected to generate 2.16 times less return on investment than TFI International. In addition to that, CONSOLIDATED is 1.04 times more volatile than TFI International. It trades about 0.02 of its total potential returns per unit of risk. TFI International is currently generating about 0.06 per unit of volatility. If you would invest  14,432  in TFI International on September 16, 2024 and sell it today you would earn a total of  853.00  from holding TFI International or generate 5.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	55.38%
Values	Daily Returns

CONSOLIDATED EDISON N  vs.  TFI International

CONSOLIDATED EDISON

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CONSOLIDATED EDISON N are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, CONSOLIDATED is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

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 fragile forward indicators, TFI International may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with CONSOLIDATED and TFI International

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

The idea behind CONSOLIDATED EDISON N and TFI International 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..