Correlation Between Thermon Group and Willdan
Can any of the company-specific risk be diversified away by investing in both Thermon Group and Willdan 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 Willdan 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 Willdan Group, you can compare the effects of market volatilities on Thermon Group and Willdan 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 Willdan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thermon Group and Willdan.
Diversification Opportunities for Thermon Group and Willdan
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thermon and Willdan is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Thermon Group Holdings and Willdan Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Willdan Group 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 Willdan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Willdan Group has no effect on the direction of Thermon Group i.e., Thermon Group and Willdan go up and down completely randomly.
Pair Corralation between Thermon Group and Willdan
Considering the 90-day investment horizon Thermon Group is expected to generate 23.87 times less return on investment than Willdan. But when comparing it to its historical volatility, Thermon Group Holdings is 1.1 times less risky than Willdan. It trades about 0.01 of its potential returns per unit of risk. Willdan Group is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,200 in Willdan Group on August 30, 2024 and sell it today you would earn a total of 1,112 from holding Willdan Group or generate 34.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thermon Group Holdings vs. Willdan Group
Performance |
| Timeline |
| Thermon Group Holdings |
| Willdan Group |
Thermon Group and Willdan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thermon Group and Willdan
The main advantage of trading using opposite Thermon Group and Willdan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thermon Group position performs unexpectedly, Willdan 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 Willdan will offset losses from the drop in Willdan's long position.| Thermon Group vs. Hurco Companies | Thermon Group vs. Enerpac Tool Group | Thermon Group vs. Enpro Industries | Thermon Group vs. Omega Flex |
| Willdan vs. Team Inc | Willdan vs. Thermon Group Holdings | Willdan vs. MRC Global | Willdan vs. Vishay Precision Group |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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