Correlation Between United Parks and Thor Industries

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

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

Diversification Opportunities for United Parks and Thor Industries

0.54

Correlation Coefficient

United Parks  Thor Industries

Very weak diversification

The 3 months correlation between United and Thor is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding United Parks Resorts and Thor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Industries and United Parks 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 United Parks Resorts 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 United Parks i.e., United Parks and Thor Industries go up and down completely randomly.

Pair Corralation between United Parks and Thor Industries

Given the investment horizon of 90 days United Parks Resorts is expected to generate 0.78 times more return on investment than Thor Industries. However, United Parks Resorts is 1.29 times less risky than Thor Industries. It trades about -0.09 of its potential returns per unit of risk. Thor Industries is currently generating about -0.08 per unit of risk. If you would invest  5,362  in United Parks Resorts on December 19, 2024 and sell it today you would lose (642.00) from holding United Parks Resorts or give up 11.97% of portfolio value over 90 days.

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

United Parks Resorts  vs.  Thor Industries

United Parks Resorts

Risk-Adjusted Performance

Very Weak

Over the last 90 days United Parks Resorts has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward-looking signals remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Thor Industries

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's technical indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with United Parks and Thor Industries

The main advantage of trading using opposite United Parks and Thor Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Parks 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 United Parks Resorts 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..