Correlation Between Thor Industries and Veren

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

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

Diversification Opportunities for Thor Industries and Veren

0.18

Correlation Coefficient

Thor Industries  Veren

Average diversification

The 3 months correlation between Thor and Veren is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Thor Industries and Veren Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veren Inc 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 Veren. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veren Inc has no effect on the direction of Thor Industries i.e., Thor Industries and Veren go up and down completely randomly.

Pair Corralation between Thor Industries and Veren

Considering the 90-day investment horizon Thor Industries is expected to under-perform the Veren. But the stock apears to be less risky and, when comparing its historical volatility, Thor Industries is 2.17 times less risky than Veren. The stock trades about -0.01 of its potential returns per unit of risk. The Veren Inc is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  492.00  in Veren Inc on December 4, 2024 and sell it today you would earn a total of  53.00  from holding Veren Inc or generate 10.77% return on investment over 90 days.

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

Thor Industries  vs.  Veren Inc

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 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.

Veren Inc

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Veren Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Veren may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Thor Industries and Veren

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

The idea behind Thor Industries and Veren Inc 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.