Correlation Between TFI International and Comcast Corp

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Can any of the company-specific risk be diversified away by investing in both TFI International and Comcast Corp 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 Comcast Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TFI International and Comcast Corp, you can compare the effects of market volatilities on TFI International and Comcast Corp 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 Comcast Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of TFI International and Comcast Corp.

Diversification Opportunities for TFI International and Comcast Corp

-0.49
  Correlation Coefficient

Very good diversification

The 3 months correlation between TFI and Comcast is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding TFI International and Comcast Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comcast Corp 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 Comcast Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comcast Corp has no effect on the direction of TFI International i.e., TFI International and Comcast Corp go up and down completely randomly.

Pair Corralation between TFI International and Comcast Corp

Given the investment horizon of 90 days TFI International is expected to generate 1.38 times more return on investment than Comcast Corp. However, TFI International is 1.38 times more volatile than Comcast Corp. It trades about 0.11 of its potential returns per unit of risk. Comcast Corp is currently generating about 0.04 per unit of risk. If you would invest  10,851  in TFI International on December 30, 2023 and sell it today you would earn a total of  5,095  from holding TFI International or generate 46.95% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

TFI International  vs.  Comcast Corp

 Performance 
       Timeline  
TFI International 

Risk-Adjusted Performance

16 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in TFI International are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain forward indicators, TFI International demonstrated solid returns over the last few months and may actually be approaching a breakup point.
Comcast Corp 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Comcast Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Comcast Corp is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

TFI International and Comcast Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with TFI International and Comcast Corp

The main advantage of trading using opposite TFI International and Comcast Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TFI International position performs unexpectedly, Comcast Corp 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 Comcast Corp will offset losses from the drop in Comcast Corp's long position.
The idea behind TFI International and Comcast Corp 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

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