Correlation Between Thor Industries and Mattel
Can any of the company-specific risk be diversified away by investing in both Thor Industries and Mattel 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 Mattel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thor Industries and Mattel Inc, you can compare the effects of market volatilities on Thor Industries and Mattel 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 Mattel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thor Industries and Mattel.
Diversification Opportunities for Thor Industries and Mattel
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Thor and Mattel is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Thor Industries and Mattel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mattel Inc 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 Mattel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mattel Inc has no effect on the direction of Thor Industries i.e., Thor Industries and Mattel go up and down completely randomly.
Pair Corralation between Thor Industries and Mattel
Considering the 90-day investment horizon Thor Industries is expected to generate 1.14 times more return on investment than Mattel. However, Thor Industries is 1.14 times more volatile than Mattel Inc. It trades about 0.04 of its potential returns per unit of risk. Mattel Inc is currently generating about 0.0 per unit of risk. If you would invest 9,820 in Thor Industries on August 25, 2024 and sell it today you would earn a total of 1,398 from holding Thor Industries or generate 14.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thor Industries vs. Mattel Inc
Performance |
| Timeline |
| Thor Industries |
| Mattel Inc |
Thor Industries and Mattel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thor Industries and Mattel
The main advantage of trading using opposite Thor Industries and Mattel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thor Industries position performs unexpectedly, Mattel 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 Mattel will offset losses from the drop in Mattel's long position.| Thor Industries vs. Nio Class A | Thor Industries vs. Rivian Automotive | Thor Industries vs. Lucid Group | Thor Industries vs. Tesla Inc |
| Mattel vs. MCBC Holdings | Mattel vs. Winnebago Industries | Mattel vs. LCI Industries | Mattel vs. Thor Industries |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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