Correlation Between Thor Industries and GM
Can any of the company-specific risk be diversified away by investing in both Thor Industries and GM 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 Thor Industries and GM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thor Industries and General Motors, you can compare the effects of market volatilities on Thor Industries and GM 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 Thor Industries with a short position of GM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thor Industries and GM.
Diversification Opportunities for Thor Industries and GM
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thor and GM is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Thor Industries and General Motors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Motors and Thor Industries 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 Thor Industries are associated (or correlated) with GM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Motors has no effect on the direction of Thor Industries i.e., Thor Industries and GM go up and down completely randomly.
Pair Corralation between Thor Industries and GM
Considering the 90-day investment horizon Thor Industries is expected to under-perform the GM. In addition to that, Thor Industries is 1.39 times more volatile than General Motors. It trades about -0.14 of its total potential returns per unit of risk. General Motors is currently generating about 0.08 per unit of volatility. If you would invest 4,400 in General Motors on January 26, 2024 and sell it today you would earn a total of 108.00 from holding General Motors or generate 2.45% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Thor Industries vs. General Motors
Performance |
Timeline |
Thor Industries |
General Motors |
Thor Industries and GM Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Thor Industries and GM
The main advantage of trading using opposite Thor Industries and GM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thor Industries position performs unexpectedly, GM 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 GM will offset losses from the drop in GM's long position.Thor Industries vs. Twin Vee Powercats | Thor Industries vs. Curtiss Motorcycles | Thor Industries vs. Marine Products | Thor Industries vs. MCBC Holdings |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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