Correlation Between Thor Industries and Almacenes Xito
Can any of the company-specific risk be diversified away by investing in both Thor Industries and Almacenes Xito 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 Almacenes Xito into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thor Industries and Almacenes xito SA, you can compare the effects of market volatilities on Thor Industries and Almacenes Xito 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 Almacenes Xito. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thor Industries and Almacenes Xito.
Diversification Opportunities for Thor Industries and Almacenes Xito
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thor and Almacenes is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Thor Industries and Almacenes xito SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Almacenes xito SA 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 Almacenes Xito. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Almacenes xito SA has no effect on the direction of Thor Industries i.e., Thor Industries and Almacenes Xito go up and down completely randomly.
Pair Corralation between Thor Industries and Almacenes Xito
Considering the 90-day investment horizon Thor Industries is expected to generate 1.18 times more return on investment than Almacenes Xito. However, Thor Industries is 1.18 times more volatile than Almacenes xito SA. It trades about 0.16 of its potential returns per unit of risk. Almacenes xito SA is currently generating about -0.23 per unit of risk. If you would invest 10,458 in Thor Industries on September 2, 2024 and sell it today you would earn a total of 702.00 from holding Thor Industries or generate 6.71% 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. Almacenes xito SA
Performance |
| Timeline |
| Thor Industries |
| Almacenes xito SA |
Thor Industries and Almacenes Xito Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thor Industries and Almacenes Xito
The main advantage of trading using opposite Thor Industries and Almacenes Xito positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thor Industries position performs unexpectedly, Almacenes Xito 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 Almacenes Xito will offset losses from the drop in Almacenes Xito's long position.The idea behind Thor Industries and Almacenes xito SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Almacenes Xito vs. Virco Manufacturing | Almacenes Xito vs. Postal Realty Trust | Almacenes Xito vs. Mativ Holdings | Almacenes Xito vs. Cleantech Power Corp |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |