Correlation Between Thor Industries and Symphony Environmental
Can any of the company-specific risk be diversified away by investing in both Thor Industries and Symphony Environmental 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 Thor Industries and Symphony Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thor Industries and Symphony Environmental Technologies, you can compare the effects of market volatilities on Thor Industries and Symphony Environmental 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 Thor Industries with a short position of Symphony Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thor Industries and Symphony Environmental.
Diversification Opportunities for Thor Industries and Symphony Environmental
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thor and Symphony is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Thor Industries and Symphony Environmental Technol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Symphony Environmental and Thor Industries 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 Thor Industries are associated (or correlated) with Symphony Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Symphony Environmental has no effect on the direction of Thor Industries i.e., Thor Industries and Symphony Environmental go up and down completely randomly.
Pair Corralation between Thor Industries and Symphony Environmental
Assuming the 90 days trading horizon Thor Industries is expected to under-perform the Symphony Environmental. But the stock apears to be less risky and, when comparing its historical volatility, Thor Industries is 1.5 times less risky than Symphony Environmental. The stock trades about -0.27 of its potential returns per unit of risk. The Symphony Environmental Technologies is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 325.00 in Symphony Environmental Technologies on September 22, 2024 and sell it today you would lose (35.00) from holding Symphony Environmental Technologies or give up 10.77% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Thor Industries vs. Symphony Environmental Technol
Performance |
| Timeline |
| Thor Industries |
| Symphony Environmental |
Thor Industries and Symphony Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thor Industries and Symphony Environmental
The main advantage of trading using opposite Thor Industries and Symphony Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thor Industries position performs unexpectedly, Symphony Environmental 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 Symphony Environmental will offset losses from the drop in Symphony Environmental's long position.| Thor Industries vs. Samsung Electronics Co | Thor Industries vs. Samsung Electronics Co | Thor Industries vs. Hyundai Motor | Thor Industries vs. Reliance Industries Ltd |
| Symphony Environmental vs. Porvair plc | Symphony Environmental vs. Alaska Air Group | Symphony Environmental vs. MyHealthChecked Plc | Symphony Environmental vs. Universal Health Services |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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