Correlation Between Thermon Group and Tennant
Can any of the company-specific risk be diversified away by investing in both Thermon Group and Tennant 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 Tennant 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 Tennant Company, you can compare the effects of market volatilities on Thermon Group and Tennant 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 Tennant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thermon Group and Tennant.
Diversification Opportunities for Thermon Group and Tennant
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Thermon and Tennant is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Thermon Group Holdings and Tennant Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tennant Company 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 Tennant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tennant Company has no effect on the direction of Thermon Group i.e., Thermon Group and Tennant go up and down completely randomly.
Pair Corralation between Thermon Group and Tennant
Considering the 90-day investment horizon Thermon Group Holdings is expected to generate 0.91 times more return on investment than Tennant. However, Thermon Group Holdings is 1.1 times less risky than Tennant. It trades about 0.37 of its potential returns per unit of risk. Tennant Company is currently generating about 0.03 per unit of risk. If you would invest 2,621 in Thermon Group Holdings on September 1, 2024 and sell it today you would earn a total of 535.00 from holding Thermon Group Holdings or generate 20.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thermon Group Holdings vs. Tennant Company
Performance |
| Timeline |
| Thermon Group Holdings |
| Tennant Company |
Thermon Group and Tennant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thermon Group and Tennant
The main advantage of trading using opposite Thermon Group and Tennant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thermon Group position performs unexpectedly, Tennant 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 Tennant will offset losses from the drop in Tennant's long position.| Thermon Group vs. Hurco Companies | Thermon Group vs. Enerpac Tool Group | Thermon Group vs. Enpro Industries | Thermon Group vs. Omega Flex |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |