Correlation Between Torm PLC and Cantor Equity

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

By analyzing existing cross correlation between Torm PLC Class and Cantor Equity Partners,, you can compare the effects of market volatilities on Torm PLC and Cantor Equity 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 Torm PLC with a short position of Cantor Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Torm PLC and Cantor Equity.

Diversification Opportunities for Torm PLC and Cantor Equity

-0.31

Correlation Coefficient

Torm PLC  Cantor Equity

Very good diversification

The 3 months correlation between Torm and Cantor is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Torm PLC Class and Cantor Equity Partners, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cantor Equity Partners, and Torm PLC 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 Torm PLC Class are associated (or correlated) with Cantor Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cantor Equity Partners, has no effect on the direction of Torm PLC i.e., Torm PLC and Cantor Equity go up and down completely randomly.

Pair Corralation between Torm PLC and Cantor Equity

Given the investment horizon of 90 days Torm PLC Class is expected to generate 0.31 times more return on investment than Cantor Equity. However, Torm PLC Class is 3.19 times less risky than Cantor Equity. It trades about 0.15 of its potential returns per unit of risk. Cantor Equity Partners, is currently generating about 0.0 per unit of risk. If you would invest  1,614  in Torm PLC Class on May 7, 2025 and sell it today you would earn a total of  367.00  from holding Torm PLC Class or generate 22.74% return on investment over 90 days.

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

Torm PLC Class  vs.  Cantor Equity Partners,

Torm PLC Class

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Torm PLC Class are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak primary indicators, Torm PLC exhibited solid returns over the last few months and may actually be approaching a breakup point.

Cantor Equity Partners,

Risk-Adjusted Performance

Weakest

Over the last 90 days Cantor Equity Partners, has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Cantor Equity is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Torm PLC and Cantor Equity

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

The idea behind Torm PLC Class and Cantor Equity Partners, 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.