Correlation Between Elamex SA and Torque Lifestyle

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

By analyzing existing cross correlation between Elamex SA de and Torque Lifestyle Brands, you can compare the effects of market volatilities on Elamex SA 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 Elamex SA with a short position of Torque Lifestyle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elamex SA and Torque Lifestyle.

Diversification Opportunities for Elamex SA and Torque Lifestyle

0.0

Correlation Coefficient

Elamex SA  Torque Lifestyle

Pay attention - limited upside

The 3 months correlation between Elamex and Torque is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Elamex SA de 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 Elamex SA 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 Elamex SA de 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 Elamex SA i.e., Elamex SA and Torque Lifestyle go up and down completely randomly.

Pair Corralation between Elamex SA and Torque Lifestyle

If you would invest  0.19  in Torque Lifestyle Brands on October 9, 2024 and sell it today you would lose (0.06) from holding Torque Lifestyle Brands or give up 31.58% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	97.5%
Values	Daily Returns

Elamex SA de  vs.  Torque Lifestyle Brands

Elamex SA de

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elamex SA de has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Elamex SA is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Torque Lifestyle Brands

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Torque Lifestyle Brands are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, Torque Lifestyle sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Elamex SA and Torque Lifestyle

The main advantage of trading using opposite Elamex SA and Torque Lifestyle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elamex SA 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.

The idea behind Elamex SA de and Torque Lifestyle Brands 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.