Correlation Between Thor Industries and Paiute Oil
Can any of the company-specific risk be diversified away by investing in both Thor Industries and Paiute Oil 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 Paiute Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thor Industries and Paiute Oil Mining, you can compare the effects of market volatilities on Thor Industries and Paiute Oil 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 Paiute Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thor Industries and Paiute Oil.
Diversification Opportunities for Thor Industries and Paiute Oil
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Thor and Paiute is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Thor Industries and Paiute Oil Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paiute Oil 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 Paiute Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paiute Oil Mining has no effect on the direction of Thor Industries i.e., Thor Industries and Paiute Oil go up and down completely randomly.
Pair Corralation between Thor Industries and Paiute Oil
Considering the 90-day investment horizon Thor Industries is expected to generate 0.08 times more return on investment than Paiute Oil. However, Thor Industries is 13.21 times less risky than Paiute Oil. It trades about -0.16 of its potential returns per unit of risk. Paiute Oil Mining is currently generating about -0.22 per unit of risk. If you would invest 11,175 in Thor Industries on September 13, 2024 and sell it today you would lose (662.00) from holding Thor Industries or give up 5.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Thor Industries vs. Paiute Oil Mining
Performance |
| Timeline |
| Thor Industries |
| Paiute Oil Mining |
Thor Industries and Paiute Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thor Industries and Paiute Oil
The main advantage of trading using opposite Thor Industries and Paiute Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thor Industries position performs unexpectedly, Paiute Oil 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 Paiute Oil will offset losses from the drop in Paiute Oil's long position.| Thor Industries vs. Marine Products | Thor Industries vs. Malibu Boats | Thor Industries vs. Brunswick | Thor Industries vs. LCI Industries |
| Paiute Oil vs. Flexible Solutions International | Paiute Oil vs. IPG Photonics | Paiute Oil vs. Abcellera Biologics | Paiute Oil vs. Stepan Company |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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