Correlation Between Middleby Corp and Thermwood
Can any of the company-specific risk be diversified away by investing in both Middleby Corp and Thermwood 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 Middleby Corp and Thermwood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Middleby Corp and Thermwood, you can compare the effects of market volatilities on Middleby Corp and Thermwood 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 Middleby Corp with a short position of Thermwood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Middleby Corp and Thermwood.
Diversification Opportunities for Middleby Corp and Thermwood
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Middleby and Thermwood is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Middleby Corp and Thermwood in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thermwood and Middleby 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 Middleby Corp are associated (or correlated) with Thermwood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thermwood has no effect on the direction of Middleby Corp i.e., Middleby Corp and Thermwood go up and down completely randomly.
Pair Corralation between Middleby Corp and Thermwood
If you would invest 13,964 in Middleby Corp on September 12, 2024 and sell it today you would earn a total of 510.00 from holding Middleby Corp or generate 3.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Middleby Corp vs. Thermwood
Performance |
| Timeline |
| Middleby Corp |
| Thermwood |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Middleby Corp and Thermwood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Middleby Corp and Thermwood
The main advantage of trading using opposite Middleby Corp and Thermwood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Middleby Corp position performs unexpectedly, Thermwood 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 Thermwood will offset losses from the drop in Thermwood's long position.| Middleby Corp vs. Enpro Industries | Middleby Corp vs. Kadant Inc | Middleby Corp vs. ITT Inc | Middleby Corp vs. Franklin Electric Co |
| Thermwood vs. John Bean Technologies | Thermwood vs. Helios Technologies | Thermwood vs. Middleby Corp | Thermwood vs. Flowserve |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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