Correlation Between Standex International and Thermon Group
Can any of the company-specific risk be diversified away by investing in both Standex International and Thermon Group 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 Standex International and Thermon Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Standex International and Thermon Group Holdings, you can compare the effects of market volatilities on Standex International and Thermon Group 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 Standex International with a short position of Thermon Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Standex International and Thermon Group.
Diversification Opportunities for Standex International and Thermon Group
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Standex and Thermon is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Standex International and Thermon Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thermon Group Holdings and Standex International 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 Standex International are associated (or correlated) with Thermon Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thermon Group Holdings has no effect on the direction of Standex International i.e., Standex International and Thermon Group go up and down completely randomly.
Pair Corralation between Standex International and Thermon Group
Considering the 90-day investment horizon Standex International is expected to generate 0.83 times more return on investment than Thermon Group. However, Standex International is 1.2 times less risky than Thermon Group. It trades about 0.08 of its potential returns per unit of risk. Thermon Group Holdings is currently generating about 0.05 per unit of risk. If you would invest 10,298 in Standex International on August 24, 2024 and sell it today you would earn a total of 10,164 from holding Standex International or generate 98.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Standex International vs. Thermon Group Holdings
Performance |
| Timeline |
| Standex International |
| Thermon Group Holdings |
Standex International and Thermon Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Standex International and Thermon Group
The main advantage of trading using opposite Standex International and Thermon Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Standex International position performs unexpectedly, Thermon Group 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 Thermon Group will offset losses from the drop in Thermon Group's long position.| Standex International vs. Gorman Rupp | Standex International vs. Franklin Electric Co | Standex International vs. Omega Flex | Standex International vs. China Yuchai International |
| Thermon Group vs. Hurco Companies | Thermon Group vs. Enerpac Tool Group | Thermon Group vs. Enpro Industries | Thermon Group vs. Omega Flex |
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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