Correlation Between TECSYS and Cargojet

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

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

Diversification Opportunities for TECSYS and Cargojet

-0.43

Correlation Coefficient

TECSYS  Cargojet

Very good diversification

The 3 months correlation between TECSYS and Cargojet is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding TECSYS Inc and Cargojet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cargojet and TECSYS 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 TECSYS Inc are associated (or correlated) with Cargojet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cargojet has no effect on the direction of TECSYS i.e., TECSYS and Cargojet go up and down completely randomly.

Pair Corralation between TECSYS and Cargojet

Assuming the 90 days trading horizon TECSYS Inc is expected to under-perform the Cargojet. In addition to that, TECSYS is 1.06 times more volatile than Cargojet. It trades about -0.03 of its total potential returns per unit of risk. Cargojet is currently generating about 0.13 per unit of volatility. If you would invest  8,718  in Cargojet on April 24, 2025 and sell it today you would earn a total of  1,566  from holding Cargojet or generate 17.96% return on investment over 90 days.

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

TECSYS Inc  vs.  Cargojet

TECSYS Inc

Risk-Adjusted Performance

Very Weak

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

Cargojet

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cargojet are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Cargojet displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TECSYS and Cargojet

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

The idea behind TECSYS Inc and Cargojet 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.