Correlation Between Interface and Torrid Holdings

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

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

Diversification Opportunities for Interface and Torrid Holdings

-0.69

Correlation Coefficient

Interface  Torrid Holdings

Excellent diversification

The 3 months correlation between Interface and Torrid is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Interface and Torrid Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Torrid Holdings and Interface 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 Interface are associated (or correlated) with Torrid Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Torrid Holdings has no effect on the direction of Interface i.e., Interface and Torrid Holdings go up and down completely randomly.

Pair Corralation between Interface and Torrid Holdings

Given the investment horizon of 90 days Interface is expected to generate 0.32 times more return on investment than Torrid Holdings. However, Interface is 3.15 times less risky than Torrid Holdings. It trades about 0.07 of its potential returns per unit of risk. Torrid Holdings is currently generating about -0.23 per unit of risk. If you would invest  1,922  in Interface on May 2, 2025 and sell it today you would earn a total of  140.00  from holding Interface or generate 7.28% return on investment over 90 days.

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

Interface  vs.  Torrid Holdings

Interface

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Interface are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting essential indicators, Interface may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Torrid Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Torrid Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in August 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Interface and Torrid Holdings

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

The idea behind Interface and Torrid Holdings 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.