Correlation Between Thor Industries and Callaway Golf
Can any of the company-specific risk be diversified away by investing in both Thor Industries and Callaway Golf 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 Callaway Golf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thor Industries and Callaway Golf, you can compare the effects of market volatilities on Thor Industries and Callaway Golf 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 Callaway Golf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thor Industries and Callaway Golf.
Diversification Opportunities for Thor Industries and Callaway Golf
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Thor and Callaway is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Thor Industries and Callaway Golf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Callaway Golf 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 Callaway Golf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Callaway Golf has no effect on the direction of Thor Industries i.e., Thor Industries and Callaway Golf go up and down completely randomly.
Pair Corralation between Thor Industries and Callaway Golf
Considering the 90-day investment horizon Thor Industries is expected to generate 0.61 times more return on investment than Callaway Golf. However, Thor Industries is 1.65 times less risky than Callaway Golf. It trades about 0.08 of its potential returns per unit of risk. Callaway Golf is currently generating about -0.23 per unit of risk. If you would invest 10,498 in Thor Industries on September 5, 2024 and sell it today you would earn a total of 351.00 from holding Thor Industries or generate 3.34% 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. Callaway Golf
Performance |
| Timeline |
| Thor Industries |
| Callaway Golf |
Thor Industries and Callaway Golf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thor Industries and Callaway Golf
The main advantage of trading using opposite Thor Industries and Callaway Golf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thor Industries position performs unexpectedly, Callaway Golf 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 Callaway Golf will offset losses from the drop in Callaway Golf's long position.| Thor Industries vs. Marine Products | Thor Industries vs. Malibu Boats | Thor Industries vs. Brunswick | Thor Industries vs. LCI Industries |
| Callaway Golf vs. Bowlero Corp | Callaway Golf vs. Johnson Outdoors | Callaway Golf vs. YETI Holdings | Callaway Golf vs. Xponential Fitness |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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