Correlation Between Flowers Foods and Torque Lifestyle
Can any of the company-specific risk be diversified away by investing in both Flowers Foods and Torque Lifestyle 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 Flowers Foods and Torque Lifestyle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flowers Foods and Torque Lifestyle Brands, you can compare the effects of market volatilities on Flowers Foods and Torque Lifestyle 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 Flowers Foods with a short position of Torque Lifestyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flowers Foods and Torque Lifestyle.
Diversification Opportunities for Flowers Foods and Torque Lifestyle
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Flowers and Torque is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Flowers Foods and Torque Lifestyle Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Torque Lifestyle Brands and Flowers Foods 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 Flowers Foods are associated (or correlated) with Torque Lifestyle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Torque Lifestyle Brands has no effect on the direction of Flowers Foods i.e., Flowers Foods and Torque Lifestyle go up and down completely randomly.
Pair Corralation between Flowers Foods and Torque Lifestyle
Considering the 90-day investment horizon Flowers Foods is expected to under-perform the Torque Lifestyle. But the stock apears to be less risky and, when comparing its historical volatility, Flowers Foods is 51.27 times less risky than Torque Lifestyle. The stock trades about -0.03 of its potential returns per unit of risk. The Torque Lifestyle Brands is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 0.16 in Torque Lifestyle Brands on September 14, 2024 and sell it today you would earn a total of 0.01 from holding Torque Lifestyle Brands or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Flowers Foods vs. Torque Lifestyle Brands
Performance |
| Timeline |
| Flowers Foods |
| Torque Lifestyle Brands |
Flowers Foods and Torque Lifestyle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flowers Foods and Torque Lifestyle
The main advantage of trading using opposite Flowers Foods and Torque Lifestyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flowers Foods position performs unexpectedly, Torque Lifestyle 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 Torque Lifestyle will offset losses from the drop in Torque Lifestyle's long position.| Flowers Foods vs. ConAgra Foods | Flowers Foods vs. McCormick Company Incorporated | Flowers Foods vs. Campbell Soup | Flowers Foods vs. Kellanova |
| Torque Lifestyle vs. Premier Foods Plc | Torque Lifestyle vs. Naturally Splendid Enterprises | Torque Lifestyle vs. Aryzta AG PK | Torque Lifestyle vs. The A2 Milk |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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