Correlation Between Almacenes Xito and Thor Industries
Can any of the company-specific risk be diversified away by investing in both Almacenes Xito 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 Almacenes Xito and Thor Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Almacenes xito SA and Thor Industries, you can compare the effects of market volatilities on Almacenes Xito 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 Almacenes Xito with a short position of Thor Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Almacenes Xito and Thor Industries.
Diversification Opportunities for Almacenes Xito and Thor Industries
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Almacenes and Thor is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Almacenes xito SA and Thor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Industries and Almacenes Xito 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 Almacenes xito SA 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 Almacenes Xito i.e., Almacenes Xito and Thor Industries go up and down completely randomly.
Pair Corralation between Almacenes Xito and Thor Industries
Given the investment horizon of 90 days Almacenes xito SA is expected to under-perform the Thor Industries. But the stock apears to be less risky and, when comparing its historical volatility, Almacenes xito SA is 1.18 times less risky than Thor Industries. The stock trades about -0.23 of its potential returns per unit of risk. The Thor Industries is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 10,458 in Thor Industries on September 2, 2024 and sell it today you would earn a total of 702.00 from holding Thor Industries or generate 6.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Almacenes xito SA vs. Thor Industries
Performance |
| Timeline |
| Almacenes xito SA |
| Thor Industries |
Almacenes Xito and Thor Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Almacenes Xito and Thor Industries
The main advantage of trading using opposite Almacenes Xito and Thor Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Almacenes Xito 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.| Almacenes Xito vs. Virco Manufacturing | Almacenes Xito vs. Postal Realty Trust | Almacenes Xito vs. Mativ Holdings | Almacenes Xito vs. Cleantech Power Corp |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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