Correlation Between Clarus Corp and Thor Industries
Can any of the company-specific risk be diversified away by investing in both Clarus Corp and Thor Industries 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 Clarus Corp and Thor Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clarus Corp and Thor Industries, you can compare the effects of market volatilities on Clarus Corp and Thor Industries 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 Clarus Corp with a short position of Thor Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clarus Corp and Thor Industries.
Diversification Opportunities for Clarus Corp and Thor Industries
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Clarus and Thor is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Clarus Corp and Thor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Industries and Clarus Corp 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 Clarus Corp are associated (or correlated) with Thor Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Industries has no effect on the direction of Clarus Corp i.e., Clarus Corp and Thor Industries go up and down completely randomly.
Pair Corralation between Clarus Corp and Thor Industries
Given the investment horizon of 90 days Clarus Corp is expected to generate 1.94 times more return on investment than Thor Industries. However, Clarus Corp is 1.94 times more volatile than Thor Industries. It trades about 0.16 of its potential returns per unit of risk. Thor Industries is currently generating about -0.19 per unit of risk. If you would invest 442.00 in Clarus Corp on September 12, 2024 and sell it today you would earn a total of 47.00 from holding Clarus Corp or generate 10.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clarus Corp vs. Thor Industries
Performance |
| Timeline |
| Clarus Corp |
| Thor Industries |
Clarus Corp and Thor Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clarus Corp and Thor Industries
The main advantage of trading using opposite Clarus Corp and Thor Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clarus Corp position performs unexpectedly, Thor Industries 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 Thor Industries will offset losses from the drop in Thor Industries' long position.| Clarus Corp vs. Johnson Outdoors | Clarus Corp vs. Escalade Incorporated | Clarus Corp vs. JAKKS Pacific | Clarus Corp vs. Six Flags Entertainment |
| Thor Industries vs. Marine Products | Thor Industries vs. Malibu Boats | Thor Industries vs. Brunswick | Thor Industries vs. LCI Industries |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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