Correlation Between Thor Industries and HWH International

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

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

Diversification Opportunities for Thor Industries and HWH International

0.19

Correlation Coefficient

Thor Industries  HWH International

Average diversification

The 3 months correlation between Thor and HWH is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Thor Industries and HWH International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HWH International 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 HWH International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HWH International has no effect on the direction of Thor Industries i.e., Thor Industries and HWH International go up and down completely randomly.

Pair Corralation between Thor Industries and HWH International

Considering the 90-day investment horizon Thor Industries is expected to generate 0.22 times more return on investment than HWH International. However, Thor Industries is 4.52 times less risky than HWH International. It trades about -0.09 of its potential returns per unit of risk. HWH International is currently generating about -0.03 per unit of risk. If you would invest  9,635  in Thor Industries on December 26, 2024 and sell it today you would lose (1,622) from holding Thor Industries or give up 16.83% of portfolio value over 90 days.

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

Thor Industries  vs.  HWH International

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.

HWH International

Risk-Adjusted Performance

Very Weak

Over the last 90 days HWH International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Thor Industries and HWH International

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

The idea behind Thor Industries and HWH International 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.