Correlation Between Thyssenkrupp and Worthington Industries
Can any of the company-specific risk be diversified away by investing in both Thyssenkrupp and Worthington Industries 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 Thyssenkrupp and Worthington Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thyssenkrupp AG ADR and Worthington Industries, you can compare the effects of market volatilities on Thyssenkrupp and Worthington Industries 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 Thyssenkrupp with a short position of Worthington Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thyssenkrupp and Worthington Industries.
Diversification Opportunities for Thyssenkrupp and Worthington Industries
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thyssenkrupp and Worthington is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Thyssenkrupp AG ADR and Worthington Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Worthington Industries and Thyssenkrupp 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 Thyssenkrupp AG ADR are associated (or correlated) with Worthington Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Worthington Industries has no effect on the direction of Thyssenkrupp i.e., Thyssenkrupp and Worthington Industries go up and down completely randomly.
Pair Corralation between Thyssenkrupp and Worthington Industries
Assuming the 90 days horizon Thyssenkrupp AG ADR is expected to under-perform the Worthington Industries. In addition to that, Thyssenkrupp is 1.17 times more volatile than Worthington Industries. It trades about -0.02 of its total potential returns per unit of risk. Worthington Industries is currently generating about 0.04 per unit of volatility. If you would invest 3,125 in Worthington Industries on September 3, 2024 and sell it today you would earn a total of 1,061 from holding Worthington Industries or generate 33.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thyssenkrupp AG ADR vs. Worthington Industries
Performance |
| Timeline |
| Thyssenkrupp AG ADR |
| Worthington Industries |
Thyssenkrupp and Worthington Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thyssenkrupp and Worthington Industries
The main advantage of trading using opposite Thyssenkrupp and Worthington Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thyssenkrupp position performs unexpectedly, Worthington Industries 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 Worthington Industries will offset losses from the drop in Worthington Industries' long position.| Thyssenkrupp vs. Mueller Industries | Thyssenkrupp vs. ESAB Corp | Thyssenkrupp vs. Worthington Industries | Thyssenkrupp vs. Allegheny Technologies Incorporated |
| Worthington Industries vs. Allegheny Technologies Incorporated | Worthington Industries vs. ESAB Corp | Worthington Industries vs. Insteel Industries | Worthington Industries vs. Mayville Engineering Co |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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