Correlation Between Torque Lifestyle and Campbell Soup
Can any of the company-specific risk be diversified away by investing in both Torque Lifestyle and Campbell Soup 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 Torque Lifestyle and Campbell Soup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Torque Lifestyle Brands and Campbell Soup, you can compare the effects of market volatilities on Torque Lifestyle and Campbell Soup 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 Torque Lifestyle with a short position of Campbell Soup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Torque Lifestyle and Campbell Soup.
Diversification Opportunities for Torque Lifestyle and Campbell Soup
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Torque and Campbell is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Torque Lifestyle Brands and Campbell Soup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Campbell Soup and Torque Lifestyle 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 Torque Lifestyle Brands are associated (or correlated) with Campbell Soup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Campbell Soup has no effect on the direction of Torque Lifestyle i.e., Torque Lifestyle and Campbell Soup go up and down completely randomly.
Pair Corralation between Torque Lifestyle and Campbell Soup
Given the investment horizon of 90 days Torque Lifestyle Brands is expected to generate 42.97 times more return on investment than Campbell Soup. However, Torque Lifestyle is 42.97 times more volatile than Campbell Soup. It trades about 0.16 of its potential returns per unit of risk. Campbell Soup is currently generating about -0.04 per unit of risk. If you would invest 0.45 in Torque Lifestyle Brands on August 31, 2024 and sell it today you would lose (0.02) from holding Torque Lifestyle Brands or give up 4.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Torque Lifestyle Brands vs. Campbell Soup
Performance |
| Timeline |
| Torque Lifestyle Brands |
| Campbell Soup |
Torque Lifestyle and Campbell Soup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Torque Lifestyle and Campbell Soup
The main advantage of trading using opposite Torque Lifestyle and Campbell Soup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Torque Lifestyle position performs unexpectedly, Campbell Soup 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 Campbell Soup will offset losses from the drop in Campbell Soup's long position.| Torque Lifestyle vs. The A2 Milk | Torque Lifestyle vs. Altavoz Entertainment | Torque Lifestyle vs. Artisan Consumer Goods | Torque Lifestyle vs. General Mills |
| Campbell Soup vs. General Mills | Campbell Soup vs. Hormel Foods | Campbell Soup vs. Kellanova | Campbell Soup vs. Lamb Weston Holdings |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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