Correlation Between Thor Industries and EZGO Technologies
Can any of the company-specific risk be diversified away by investing in both Thor Industries and EZGO Technologies 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 EZGO Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thor Industries and EZGO Technologies, you can compare the effects of market volatilities on Thor Industries and EZGO Technologies 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 EZGO Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thor Industries and EZGO Technologies.
Diversification Opportunities for Thor Industries and EZGO Technologies
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thor and EZGO is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Thor Industries and EZGO Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EZGO Technologies 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 EZGO Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EZGO Technologies has no effect on the direction of Thor Industries i.e., Thor Industries and EZGO Technologies go up and down completely randomly.
Pair Corralation between Thor Industries and EZGO Technologies
Considering the 90-day investment horizon Thor Industries is expected to generate 0.57 times more return on investment than EZGO Technologies. However, Thor Industries is 1.76 times less risky than EZGO Technologies. It trades about 0.14 of its potential returns per unit of risk. EZGO Technologies is currently generating about -0.14 per unit of risk. If you would invest 10,603 in Thor Industries on August 27, 2024 and sell it today you would earn a total of 615.00 from holding Thor Industries or generate 5.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thor Industries vs. EZGO Technologies
Performance |
| Timeline |
| Thor Industries |
| EZGO Technologies |
Thor Industries and EZGO Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thor Industries and EZGO Technologies
The main advantage of trading using opposite Thor Industries and EZGO Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thor Industries position performs unexpectedly, EZGO Technologies 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 EZGO Technologies will offset losses from the drop in EZGO Technologies' long position.| Thor Industries vs. Nio Class A | Thor Industries vs. Rivian Automotive | Thor Industries vs. Lucid Group | Thor Industries vs. Tesla Inc |
| EZGO Technologies vs. Vision Marine Technologies | EZGO Technologies vs. Marine Products | EZGO Technologies vs. Thor Industries | EZGO Technologies vs. BRP 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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