Correlation Between Thor Industries and Neogen
Can any of the company-specific risk be diversified away by investing in both Thor Industries and Neogen 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 Neogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thor Industries and Neogen, you can compare the effects of market volatilities on Thor Industries and Neogen 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 Neogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thor Industries and Neogen.
Diversification Opportunities for Thor Industries and Neogen
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Thor and Neogen is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Thor Industries and Neogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neogen 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 Neogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neogen has no effect on the direction of Thor Industries i.e., Thor Industries and Neogen go up and down completely randomly.
Pair Corralation between Thor Industries and Neogen
Considering the 90-day investment horizon Thor Industries is expected to generate 0.67 times more return on investment than Neogen. However, Thor Industries is 1.49 times less risky than Neogen. It trades about 0.16 of its potential returns per unit of risk. Neogen is currently generating about -0.01 per unit of risk. If you would invest 10,458 in Thor Industries on September 2, 2024 and sell it today you would earn a total of 702.00 from holding Thor Industries or generate 6.71% 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. Neogen
Performance |
| Timeline |
| Thor Industries |
| Neogen |
Thor Industries and Neogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thor Industries and Neogen
The main advantage of trading using opposite Thor Industries and Neogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thor Industries position performs unexpectedly, Neogen 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 Neogen will offset losses from the drop in Neogen's long position.The idea behind Thor Industries and Neogen pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Neogen vs. Qiagen NV | Neogen vs. Aclaris Therapeutics | Neogen vs. IQVIA Holdings | Neogen vs. Medpace Holdings |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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