Correlation Between Taylor Devices and Thermon Group
Can any of the company-specific risk be diversified away by investing in both Taylor Devices 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 Taylor Devices and Thermon Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taylor Devices and Thermon Group Holdings, you can compare the effects of market volatilities on Taylor Devices 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 Taylor Devices with a short position of Thermon Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taylor Devices and Thermon Group.
Diversification Opportunities for Taylor Devices and Thermon Group
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Taylor and Thermon is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Taylor Devices 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 Taylor Devices 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 Taylor Devices 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 Taylor Devices i.e., Taylor Devices and Thermon Group go up and down completely randomly.
Pair Corralation between Taylor Devices and Thermon Group
Given the investment horizon of 90 days Taylor Devices is expected to generate 3.81 times less return on investment than Thermon Group. In addition to that, Taylor Devices is 2.17 times more volatile than Thermon Group Holdings. It trades about 0.04 of its total potential returns per unit of risk. Thermon Group Holdings is currently generating about 0.37 per unit of volatility. If you would invest 2,621 in Thermon Group Holdings on September 1, 2024 and sell it today you would earn a total of 535.00 from holding Thermon Group Holdings or generate 20.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taylor Devices vs. Thermon Group Holdings
Performance |
| Timeline |
| Taylor Devices |
| Thermon Group Holdings |
Taylor Devices and Thermon Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taylor Devices and Thermon Group
The main advantage of trading using opposite Taylor Devices and Thermon Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taylor Devices 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.| Taylor Devices vs. Tennant Company | Taylor Devices vs. Kadant Inc | Taylor Devices vs. Enpro Industries | Taylor Devices vs. Luxfer Holdings PLC |
| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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