Correlation Between Thor Industries and TruBridge
Can any of the company-specific risk be diversified away by investing in both Thor Industries and TruBridge 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 TruBridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thor Industries and TruBridge, you can compare the effects of market volatilities on Thor Industries and TruBridge 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 TruBridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thor Industries and TruBridge.
Diversification Opportunities for Thor Industries and TruBridge
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Thor and TruBridge is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Thor Industries and TruBridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TruBridge 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 TruBridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TruBridge has no effect on the direction of Thor Industries i.e., Thor Industries and TruBridge go up and down completely randomly.
Pair Corralation between Thor Industries and TruBridge
Considering the 90-day investment horizon Thor Industries is expected to under-perform the TruBridge. But the stock apears to be less risky and, when comparing its historical volatility, Thor Industries is 1.05 times less risky than TruBridge. The stock trades about -0.06 of its potential returns per unit of risk. The TruBridge is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 1,809 in TruBridge on December 5, 2024 and sell it today you would earn a total of 1,131 from holding TruBridge or generate 62.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Thor Industries vs. TruBridge
Performance |
Timeline |
Thor Industries |
TruBridge |
Thor Industries and TruBridge Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Thor Industries and TruBridge
The main advantage of trading using opposite Thor Industries and TruBridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thor Industries position performs unexpectedly, TruBridge 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 TruBridge will offset losses from the drop in TruBridge's long position.Thor Industries vs. Marine Products | Thor Industries vs. Malibu Boats | Thor Industries vs. Brunswick | Thor Industries vs. LCI Industries |
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Check out your portfolio center.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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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