Correlation Between Thermon Group and Vestas Wind
Can any of the company-specific risk be diversified away by investing in both Thermon Group and Vestas Wind 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 Vestas Wind 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 Vestas Wind Systems, you can compare the effects of market volatilities on Thermon Group and Vestas Wind 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 Vestas Wind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thermon Group and Vestas Wind.
Diversification Opportunities for Thermon Group and Vestas Wind
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thermon and Vestas is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Thermon Group Holdings and Vestas Wind Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestas Wind Systems 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 Vestas Wind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestas Wind Systems has no effect on the direction of Thermon Group i.e., Thermon Group and Vestas Wind go up and down completely randomly.
Pair Corralation between Thermon Group and Vestas Wind
Considering the 90-day investment horizon Thermon Group Holdings is expected to under-perform the Vestas Wind. But the stock apears to be less risky and, when comparing its historical volatility, Thermon Group Holdings is 2.62 times less risky than Vestas Wind. The stock trades about -0.24 of its potential returns per unit of risk. The Vestas Wind Systems is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 1,433 in Vestas Wind Systems on November 7, 2024 and sell it today you would lose (100.00) from holding Vestas Wind Systems or give up 6.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thermon Group Holdings vs. Vestas Wind Systems
Performance |
| Timeline |
| Thermon Group Holdings |
| Vestas Wind Systems |
Thermon Group and Vestas Wind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thermon Group and Vestas Wind
The main advantage of trading using opposite Thermon Group and Vestas Wind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thermon Group position performs unexpectedly, Vestas Wind 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 Vestas Wind will offset losses from the drop in Vestas Wind's long position.| Thermon Group vs. Hurco Companies | Thermon Group vs. Enerpac Tool Group | Thermon Group vs. Enpro Industries | Thermon Group vs. Omega Flex |
| Vestas Wind vs. KONE Oyj | Vestas Wind vs. Spirax Sarco Engineering PLC | Vestas Wind vs. Atlas Copco ADR | Vestas Wind vs. IDEX Corporation |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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