Correlation Between Landcadia Holdings and Thor Industries

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

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

Diversification Opportunities for Landcadia Holdings and Thor Industries

-0.63

Correlation Coefficient

Landcadia Holdings  Thor Industries

Excellent diversification

The 3 months correlation between Landcadia and Thor is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Landcadia Holdings II and Thor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Industries and Landcadia Holdings 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 Landcadia Holdings II 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 Landcadia Holdings i.e., Landcadia Holdings and Thor Industries go up and down completely randomly.

Pair Corralation between Landcadia Holdings and Thor Industries

If you would invest  1,020  in Landcadia Holdings II on October 9, 2024 and sell it today you would earn a total of  0.00  from holding Landcadia Holdings II or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	5.26%
Values	Daily Returns

Landcadia Holdings II  vs.  Thor Industries

Landcadia Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Thor Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Thor Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Landcadia Holdings and Thor Industries

The main advantage of trading using opposite Landcadia Holdings and Thor Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Landcadia Holdings 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 Landcadia Holdings II 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.