Correlation Between Thor Industries and Evil Empire

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

By analyzing existing cross correlation between Thor Industries and Evil Empire Designs, you can compare the effects of market volatilities on Thor Industries and Evil Empire 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 Evil Empire. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thor Industries and Evil Empire.

Diversification Opportunities for Thor Industries and Evil Empire

0.4

Correlation Coefficient

Thor Industries  Evil Empire

Very weak diversification

The 3 months correlation between Thor and Evil is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Thor Industries and Evil Empire Designs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evil Empire Designs 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 Evil Empire. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evil Empire Designs has no effect on the direction of Thor Industries i.e., Thor Industries and Evil Empire go up and down completely randomly.

Pair Corralation between Thor Industries and Evil Empire

Considering the 90-day investment horizon Thor Industries is expected to generate 0.37 times more return on investment than Evil Empire. However, Thor Industries is 2.73 times less risky than Evil Empire. It trades about -0.06 of its potential returns per unit of risk. Evil Empire Designs is currently generating about -0.13 per unit of risk. If you would invest  10,352  in Thor Industries on December 5, 2024 and sell it today you would lose (829.00) from holding Thor Industries or give up 8.01% of portfolio value over 90 days.

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

Thor Industries  vs.  Evil Empire Designs

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 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.

Evil Empire Designs

Risk-Adjusted Performance

Very Weak

Over the last 90 days Evil Empire Designs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Thor Industries and Evil Empire

The main advantage of trading using opposite Thor Industries and Evil Empire positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thor Industries position performs unexpectedly, Evil Empire 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 Evil Empire will offset losses from the drop in Evil Empire's long position.

The idea behind Thor Industries and Evil Empire Designs 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.