Correlation Between Thermon Group and Limoneira
Can any of the company-specific risk be diversified away by investing in both Thermon Group and Limoneira 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 Thermon Group and Limoneira into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thermon Group Holdings and Limoneira Co, you can compare the effects of market volatilities on Thermon Group and Limoneira 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 Thermon Group with a short position of Limoneira. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thermon Group and Limoneira.
Diversification Opportunities for Thermon Group and Limoneira
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thermon and Limoneira is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Thermon Group Holdings and Limoneira Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Limoneira and Thermon Group 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 Thermon Group Holdings are associated (or correlated) with Limoneira. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Limoneira has no effect on the direction of Thermon Group i.e., Thermon Group and Limoneira go up and down completely randomly.
Pair Corralation between Thermon Group and Limoneira
Considering the 90-day investment horizon Thermon Group Holdings is expected to under-perform the Limoneira. In addition to that, Thermon Group is 1.13 times more volatile than Limoneira Co. It trades about -0.01 of its total potential returns per unit of risk. Limoneira Co is currently generating about 0.05 per unit of volatility. If you would invest 1,799 in Limoneira Co on November 9, 2024 and sell it today you would earn a total of 491.00 from holding Limoneira Co or generate 27.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thermon Group Holdings vs. Limoneira Co
Performance |
| Timeline |
| Thermon Group Holdings |
| Limoneira |
Thermon Group and Limoneira Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thermon Group and Limoneira
The main advantage of trading using opposite Thermon Group and Limoneira positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thermon Group position performs unexpectedly, Limoneira 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 Limoneira will offset losses from the drop in Limoneira's long position.| Thermon Group vs. Hurco Companies | Thermon Group vs. Enerpac Tool Group | Thermon Group vs. Enpro Industries | Thermon Group vs. Omega Flex |
| Limoneira vs. Dole PLC | Limoneira vs. Alico Inc | Limoneira vs. Adecoagro SA | Limoneira vs. Cal Maine Foods |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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