Correlation Between TFI International and WSP Global

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

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

Diversification Opportunities for TFI International and WSP Global

0.6

Correlation Coefficient

TFI International  WSP Global

Poor diversification

The 3 months correlation between TFI and WSP is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding TFI International and WSP Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WSP Global 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 WSP Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WSP Global has no effect on the direction of TFI International i.e., TFI International and WSP Global go up and down completely randomly.

Pair Corralation between TFI International and WSP Global

Assuming the 90 days trading horizon TFI International is expected to generate 2.07 times less return on investment than WSP Global. In addition to that, TFI International is 2.15 times more volatile than WSP Global. It trades about 0.04 of its total potential returns per unit of risk. WSP Global is currently generating about 0.18 per unit of volatility. If you would invest  25,007  in WSP Global on May 4, 2025 and sell it today you would earn a total of  3,148  from holding WSP Global or generate 12.59% return on investment over 90 days.

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

TFI International  vs.  WSP Global

TFI International

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in TFI International are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, TFI International is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

WSP Global

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WSP Global are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, WSP Global may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with TFI International and WSP Global

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

The idea behind TFI International and WSP Global 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.