Correlation Between Torque Lifestyle and Fraser
Can any of the company-specific risk be diversified away by investing in both Torque Lifestyle and Fraser 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 Fraser 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 Fraser and Neave, you can compare the effects of market volatilities on Torque Lifestyle and Fraser 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 Fraser. Check out your portfolio center. Please also check ongoing floating volatility patterns of Torque Lifestyle and Fraser.
Diversification Opportunities for Torque Lifestyle and Fraser
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Torque and Fraser is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Torque Lifestyle Brands and Fraser and Neave in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fraser and Neave 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 Fraser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fraser and Neave has no effect on the direction of Torque Lifestyle i.e., Torque Lifestyle and Fraser go up and down completely randomly.
Pair Corralation between Torque Lifestyle and Fraser
Given the investment horizon of 90 days Torque Lifestyle Brands is expected to generate 4.3 times more return on investment than Fraser. However, Torque Lifestyle is 4.3 times more volatile than Fraser and Neave. It trades about 0.05 of its potential returns per unit of risk. Fraser and Neave is currently generating about 0.04 per unit of risk. If you would invest 0.85 in Torque Lifestyle Brands on September 13, 2024 and sell it today you would lose (0.68) from holding Torque Lifestyle Brands or give up 80.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 60.2% |
| Values | Daily Returns |
Torque Lifestyle Brands vs. Fraser and Neave
Performance |
| Timeline |
| Torque Lifestyle Brands |
| Fraser and Neave |
Torque Lifestyle and Fraser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Torque Lifestyle and Fraser
The main advantage of trading using opposite Torque Lifestyle and Fraser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Torque Lifestyle position performs unexpectedly, Fraser 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 Fraser will offset losses from the drop in Fraser's long position.| Torque Lifestyle vs. BRF SA ADR | Torque Lifestyle vs. Pilgrims Pride Corp | Torque Lifestyle vs. John B Sanfilippo | Torque Lifestyle vs. Seneca Foods Corp |
| Fraser vs. BRF SA ADR | Fraser vs. Pilgrims Pride Corp | Fraser vs. John B Sanfilippo | Fraser vs. Seneca Foods Corp |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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