Correlation Between Thor Industries and Kinetik Holdings
Can any of the company-specific risk be diversified away by investing in both Thor Industries and Kinetik Holdings 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 Kinetik Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thor Industries and Kinetik Holdings, you can compare the effects of market volatilities on Thor Industries and Kinetik Holdings 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 Kinetik Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thor Industries and Kinetik Holdings.
Diversification Opportunities for Thor Industries and Kinetik Holdings
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Thor and Kinetik is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Thor Industries and Kinetik Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetik Holdings 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 Kinetik Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetik Holdings has no effect on the direction of Thor Industries i.e., Thor Industries and Kinetik Holdings go up and down completely randomly.
Pair Corralation between Thor Industries and Kinetik Holdings
Considering the 90-day investment horizon Thor Industries is expected to generate 2.59 times less return on investment than Kinetik Holdings. In addition to that, Thor Industries is 1.27 times more volatile than Kinetik Holdings. It trades about 0.04 of its total potential returns per unit of risk. Kinetik Holdings is currently generating about 0.12 per unit of volatility. If you would invest 2,917 in Kinetik Holdings on September 1, 2024 and sell it today you would earn a total of 2,985 from holding Kinetik Holdings or generate 102.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thor Industries vs. Kinetik Holdings
Performance |
| Timeline |
| Thor Industries |
| Kinetik Holdings |
Thor Industries and Kinetik Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thor Industries and Kinetik Holdings
The main advantage of trading using opposite Thor Industries and Kinetik Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thor Industries position performs unexpectedly, Kinetik Holdings 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 Kinetik Holdings will offset losses from the drop in Kinetik Holdings' long position.| Thor Industries vs. Marine Products | Thor Industries vs. Malibu Boats | Thor Industries vs. Brunswick | Thor Industries vs. LCI Industries |
| Kinetik Holdings vs. Western Midstream Partners | Kinetik Holdings vs. DT Midstream | Kinetik Holdings vs. MPLX LP | Kinetik Holdings vs. Hess Midstream Partners |
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 CEOs Directory module to screen CEOs from public companies around the world.
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