Correlation Between Thor Industries and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both Thor Industries and Harmony Gold 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 Harmony Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thor Industries and Harmony Gold Mining, you can compare the effects of market volatilities on Thor Industries and Harmony Gold 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 Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thor Industries and Harmony Gold.
Diversification Opportunities for Thor Industries and Harmony Gold
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thor and Harmony is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Thor Industries and Harmony Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harmony Gold Mining 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 Harmony Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harmony Gold Mining has no effect on the direction of Thor Industries i.e., Thor Industries and Harmony Gold go up and down completely randomly.
Pair Corralation between Thor Industries and Harmony Gold
Considering the 90-day investment horizon Thor Industries is expected to generate 0.56 times more return on investment than Harmony Gold. However, Thor Industries is 1.8 times less risky than Harmony Gold. It trades about -0.34 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about -0.23 per unit of risk. If you would invest 10,407 in Thor Industries on October 14, 2024 and sell it today you would lose (1,075) from holding Thor Industries or give up 10.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thor Industries vs. Harmony Gold Mining
Performance |
| Timeline |
| Thor Industries |
| Harmony Gold Mining |
Thor Industries and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thor Industries and Harmony Gold
The main advantage of trading using opposite Thor Industries and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thor Industries position performs unexpectedly, Harmony Gold 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 Harmony Gold will offset losses from the drop in Harmony Gold's long position.| Thor Industries vs. Marine Products | Thor Industries vs. Malibu Boats | Thor Industries vs. Brunswick | Thor Industries vs. LCI Industries |
| Harmony Gold vs. Vodka Brands Corp | Harmony Gold vs. Universal Stainless Alloy | Harmony Gold vs. Nippon Steel Corp | Harmony Gold vs. Safety Shot |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |