Correlation Between Torm PLC and Mosaic

Can any of the company-specific risk be diversified away by investing in both Torm PLC and Mosaic 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 Mosaic 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 The Mosaic, you can compare the effects of market volatilities on Torm PLC and Mosaic 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 Mosaic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Torm PLC and Mosaic.

Diversification Opportunities for Torm PLC and Mosaic

0.58

Correlation Coefficient

Torm PLC  Mosaic

Very weak diversification

The 3 months correlation between Torm and Mosaic is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Torm PLC Class and The Mosaic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mosaic 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 Mosaic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mosaic has no effect on the direction of Torm PLC i.e., Torm PLC and Mosaic go up and down completely randomly.

Pair Corralation between Torm PLC and Mosaic

Given the investment horizon of 90 days Torm PLC is expected to generate 1.57 times less return on investment than Mosaic. In addition to that, Torm PLC is 1.41 times more volatile than The Mosaic. It trades about 0.08 of its total potential returns per unit of risk. The Mosaic is currently generating about 0.17 per unit of volatility. If you would invest  3,042  in The Mosaic on May 3, 2025 and sell it today you would earn a total of  559.00  from holding The Mosaic or generate 18.38% return on investment over 90 days.

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

Torm PLC Class  vs.  The Mosaic

Torm PLC Class

Risk-Adjusted Performance

OK

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

Mosaic

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Mosaic are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Mosaic unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Torm PLC and Mosaic

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

The idea behind Torm PLC Class and The Mosaic 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.