Correlation Between Thor Industries and Chemtrade Logistics
Can any of the company-specific risk be diversified away by investing in both Thor Industries and Chemtrade Logistics 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 Thor Industries and Chemtrade Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thor Industries and Chemtrade Logistics Income, you can compare the effects of market volatilities on Thor Industries and Chemtrade Logistics 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 Thor Industries with a short position of Chemtrade Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thor Industries and Chemtrade Logistics.
Diversification Opportunities for Thor Industries and Chemtrade Logistics
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thor and Chemtrade is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Thor Industries and Chemtrade Logistics Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemtrade Logistics and Thor Industries 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 Thor Industries are associated (or correlated) with Chemtrade Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chemtrade Logistics has no effect on the direction of Thor Industries i.e., Thor Industries and Chemtrade Logistics go up and down completely randomly.
Pair Corralation between Thor Industries and Chemtrade Logistics
Considering the 90-day investment horizon Thor Industries is expected to generate 1.0 times more return on investment than Chemtrade Logistics. However, Thor Industries is 1.0 times more volatile than Chemtrade Logistics Income. It trades about -0.31 of its potential returns per unit of risk. Chemtrade Logistics Income is currently generating about -0.37 per unit of risk. If you would invest 10,575 in Thor Industries on October 9, 2024 and sell it today you would lose (983.00) from holding Thor Industries or give up 9.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thor Industries vs. Chemtrade Logistics Income
Performance |
| Timeline |
| Thor Industries |
| Chemtrade Logistics |
Thor Industries and Chemtrade Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thor Industries and Chemtrade Logistics
The main advantage of trading using opposite Thor Industries and Chemtrade Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thor Industries position performs unexpectedly, Chemtrade Logistics 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 Chemtrade Logistics will offset losses from the drop in Chemtrade Logistics' long position.| Thor Industries vs. Marine Products | Thor Industries vs. Malibu Boats | Thor Industries vs. Brunswick | Thor Industries vs. LCI Industries |
| Chemtrade Logistics vs. Arq Inc | Chemtrade Logistics vs. American Vanguard | Chemtrade Logistics vs. The Mosaic | Chemtrade Logistics vs. Hawkins |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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