Correlation Between Mulberry Group and Thor Industries
Can any of the company-specific risk be diversified away by investing in both Mulberry Group 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 Mulberry Group and Thor Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mulberry Group PLC and Thor Industries, you can compare the effects of market volatilities on Mulberry Group 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 Mulberry Group with a short position of Thor Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mulberry Group and Thor Industries.
Diversification Opportunities for Mulberry Group and Thor Industries
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mulberry and Thor is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Mulberry Group PLC and Thor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Industries and Mulberry Group 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 Mulberry Group PLC 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 Mulberry Group i.e., Mulberry Group and Thor Industries go up and down completely randomly.
Pair Corralation between Mulberry Group and Thor Industries
Assuming the 90 days trading horizon Mulberry Group PLC is expected to under-perform the Thor Industries. In addition to that, Mulberry Group is 1.32 times more volatile than Thor Industries. It trades about -0.03 of its total potential returns per unit of risk. Thor Industries is currently generating about 0.04 per unit of volatility. If you would invest 7,248 in Thor Industries on September 23, 2024 and sell it today you would earn a total of 2,308 from holding Thor Industries or generate 31.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 84.69% |
| Values | Daily Returns |
Mulberry Group PLC vs. Thor Industries
Performance |
| Timeline |
| Mulberry Group PLC |
| Thor Industries |
Mulberry Group and Thor Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mulberry Group and Thor Industries
The main advantage of trading using opposite Mulberry Group and Thor Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mulberry Group 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.| Mulberry Group vs. Rockfire Resources plc | Mulberry Group vs. Tlou Energy | Mulberry Group vs. Ikigai Ventures | Mulberry Group vs. Falcon Oil Gas |
| Thor Industries vs. Uniper SE | Thor Industries vs. Mulberry Group PLC | Thor Industries vs. London Security Plc | Thor Industries vs. Triad Group PLC |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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