Correlation Between Thor Industries and Surf Air
Can any of the company-specific risk be diversified away by investing in both Thor Industries and Surf Air 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 Surf Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thor Industries and Surf Air Mobility, you can compare the effects of market volatilities on Thor Industries and Surf Air 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 Surf Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thor Industries and Surf Air.
Diversification Opportunities for Thor Industries and Surf Air
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Thor and Surf is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Thor Industries and Surf Air Mobility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Surf Air Mobility 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 Surf Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Surf Air Mobility has no effect on the direction of Thor Industries i.e., Thor Industries and Surf Air go up and down completely randomly.
Pair Corralation between Thor Industries and Surf Air
Considering the 90-day investment horizon Thor Industries is expected to generate 30.12 times less return on investment than Surf Air. But when comparing it to its historical volatility, Thor Industries is 26.82 times less risky than Surf Air. It trades about 0.05 of its potential returns per unit of risk. Surf Air Mobility is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 5,377 in Surf Air Mobility on August 26, 2024 and sell it today you would lose (5,109) from holding Surf Air Mobility or give up 95.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.72% |
| Values | Daily Returns |
Thor Industries vs. Surf Air Mobility
Performance |
| Timeline |
| Thor Industries |
| Surf Air Mobility |
Thor Industries and Surf Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thor Industries and Surf Air
The main advantage of trading using opposite Thor Industries and Surf Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thor Industries position performs unexpectedly, Surf Air 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 Surf Air will offset losses from the drop in Surf Air's long position.| Thor Industries vs. Nio Class A | Thor Industries vs. Rivian Automotive | Thor Industries vs. Lucid Group | Thor Industries vs. Tesla Inc |
| Surf Air vs. PACCAR Inc | Surf Air vs. Tesla Inc | Surf Air vs. Thor Industries | Surf Air vs. Barrick Gold Corp |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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