Correlation Between Hasbro and Thor Industries

Can any of the company-specific risk be diversified away by investing in both Hasbro 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 Hasbro and Thor Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hasbro Inc and Thor Industries, you can compare the effects of market volatilities on Hasbro 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 Hasbro with a short position of Thor Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hasbro and Thor Industries.

Diversification Opportunities for Hasbro and Thor Industries

-0.11

Correlation Coefficient

Hasbro  Thor Industries

Good diversification

The 3 months correlation between Hasbro and Thor is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Hasbro Inc and Thor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Industries and Hasbro 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 Hasbro Inc 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 Hasbro i.e., Hasbro and Thor Industries go up and down completely randomly.

Pair Corralation between Hasbro and Thor Industries

Considering the 90-day investment horizon Hasbro is expected to generate 1.51 times less return on investment than Thor Industries. But when comparing it to its historical volatility, Hasbro Inc is 1.12 times less risky than Thor Industries. It trades about 0.03 of its potential returns per unit of risk. Thor Industries is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  8,032  in Thor Industries on September 4, 2024 and sell it today you would earn a total of  2,817  from holding Thor Industries or generate 35.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Hasbro Inc  vs.  Thor Industries

Hasbro Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hasbro Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Hasbro is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Thor Industries

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Thor Industries are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical indicators, Thor Industries is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Hasbro and Thor Industries

The main advantage of trading using opposite Hasbro and Thor Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hasbro 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.

The idea behind Hasbro Inc and Thor Industries pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.