Correlation Between Thor Industries and SES AI

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

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

Diversification Opportunities for Thor Industries and SES AI

-0.5

Correlation Coefficient

Thor Industries  SES AI

Very good diversification

The 3 months correlation between Thor and SES is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Thor Industries and SES AI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SES AI Corp 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 SES AI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SES AI Corp has no effect on the direction of Thor Industries i.e., Thor Industries and SES AI go up and down completely randomly.

Pair Corralation between Thor Industries and SES AI

Considering the 90-day investment horizon Thor Industries is expected to under-perform the SES AI. But the stock apears to be less risky and, when comparing its historical volatility, Thor Industries is 5.13 times less risky than SES AI. The stock trades about -0.13 of its potential returns per unit of risk. The SES AI Corp is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  32.00  in SES AI Corp on September 15, 2024 and sell it today you would earn a total of  9.00  from holding SES AI Corp or generate 28.13% return on investment over 90 days.

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

Thor Industries  vs.  SES AI Corp

Thor Industries

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Thor Industries are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical indicators, Thor Industries is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

SES AI Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SES AI Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Thor Industries and SES AI

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

The idea behind Thor Industries and SES AI Corp 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.