Correlation Between Thor Industries and MCBC Holdings

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

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

Diversification Opportunities for Thor Industries and MCBC Holdings

0.62

Correlation Coefficient

Thor Industries  MCBC Holdings

Poor diversification

The 3 months correlation between Thor and MCBC is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Thor Industries and MCBC Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MCBC Holdings 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 MCBC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MCBC Holdings has no effect on the direction of Thor Industries i.e., Thor Industries and MCBC Holdings go up and down completely randomly.

Pair Corralation between Thor Industries and MCBC Holdings

Considering the 90-day investment horizon Thor Industries is expected to under-perform the MCBC Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Thor Industries is 1.04 times less risky than MCBC Holdings. The stock trades about -0.08 of its potential returns per unit of risk. The MCBC Holdings is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  1,872  in MCBC Holdings on December 27, 2024 and sell it today you would lose (133.00) from holding MCBC Holdings or give up 7.1% of portfolio value over 90 days.

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

Thor Industries  vs.  MCBC Holdings

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.

MCBC Holdings

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Thor Industries and MCBC Holdings

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

The idea behind Thor Industries and MCBC Holdings 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.