Correlation Between Thor Industries and Solo Brands
Can any of the company-specific risk be diversified away by investing in both Thor Industries and Solo Brands 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 Solo Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thor Industries and Solo Brands, you can compare the effects of market volatilities on Thor Industries and Solo Brands 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 Solo Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thor Industries and Solo Brands.
Diversification Opportunities for Thor Industries and Solo Brands
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thor and Solo is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Thor Industries and Solo Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solo Brands 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 Solo Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solo Brands has no effect on the direction of Thor Industries i.e., Thor Industries and Solo Brands go up and down completely randomly.
Pair Corralation between Thor Industries and Solo Brands
Considering the 90-day investment horizon Thor Industries is expected to generate 0.4 times more return on investment than Solo Brands. However, Thor Industries is 2.47 times less risky than Solo Brands. It trades about 0.02 of its potential returns per unit of risk. Solo Brands is currently generating about -0.07 per unit of risk. If you would invest 10,611 in Thor Industries on September 3, 2024 and sell it today you would earn a total of 484.00 from holding Thor Industries or generate 4.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thor Industries vs. Solo Brands
Performance |
| Timeline |
| Thor Industries |
| Solo Brands |
Thor Industries and Solo Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thor Industries and Solo Brands
The main advantage of trading using opposite Thor Industries and Solo Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thor Industries position performs unexpectedly, Solo Brands 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 Solo Brands will offset losses from the drop in Solo Brands' long position.| Thor Industries vs. Marine Products | Thor Industries vs. Malibu Boats | Thor Industries vs. Brunswick | Thor Industries vs. LCI Industries |
| Solo Brands vs. Qurate Retail Series | Solo Brands vs. Hour Loop | Solo Brands vs. 1StdibsCom | Solo Brands vs. Baozun Inc |
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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