Correlation Between Worldwide Healthcare and Thor Industries
Can any of the company-specific risk be diversified away by investing in both Worldwide Healthcare and Thor 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 Worldwide Healthcare and Thor Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Worldwide Healthcare Trust and Thor Industries, you can compare the effects of market volatilities on Worldwide Healthcare and Thor 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 Worldwide Healthcare with a short position of Thor Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Worldwide Healthcare and Thor Industries.
Diversification Opportunities for Worldwide Healthcare and Thor Industries
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Worldwide and Thor is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Worldwide Healthcare Trust and Thor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Industries and Worldwide Healthcare 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 Worldwide Healthcare Trust are associated (or correlated) with Thor Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Industries has no effect on the direction of Worldwide Healthcare i.e., Worldwide Healthcare and Thor Industries go up and down completely randomly.
Pair Corralation between Worldwide Healthcare and Thor Industries
Assuming the 90 days trading horizon Worldwide Healthcare Trust is expected to under-perform the Thor Industries. But the stock apears to be less risky and, when comparing its historical volatility, Worldwide Healthcare Trust is 2.92 times less risky than Thor Industries. The stock trades about -0.1 of its potential returns per unit of risk. The Thor Industries is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 8,914 in Thor Industries on September 19, 2024 and sell it today you would earn a total of 1,422 from holding Thor Industries or generate 15.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.34% |
| Values | Daily Returns |
Worldwide Healthcare Trust vs. Thor Industries
Performance |
| Timeline |
| Worldwide Healthcare |
| Thor Industries |
Worldwide Healthcare and Thor Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Worldwide Healthcare and Thor Industries
The main advantage of trading using opposite Worldwide Healthcare and Thor Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Worldwide Healthcare position performs unexpectedly, Thor 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 Thor Industries will offset losses from the drop in Thor Industries' long position.| Worldwide Healthcare vs. Catalyst Media Group | Worldwide Healthcare vs. CATLIN GROUP | Worldwide Healthcare vs. Tamburi Investment Partners | Worldwide Healthcare vs. Magnora ASA |
| Thor Industries vs. L3Harris Technologies | Thor Industries vs. Worldwide Healthcare Trust | Thor Industries vs. Bellevue Healthcare Trust | Thor Industries vs. HCA Healthcare |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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