Correlation Between Tigo Energy and Thor Industries
Can any of the company-specific risk be diversified away by investing in both Tigo Energy and Thor Industries 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 Tigo Energy and Thor Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tigo Energy and Thor Industries, you can compare the effects of market volatilities on Tigo Energy and Thor Industries 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 Tigo Energy with a short position of Thor Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tigo Energy and Thor Industries.
Diversification Opportunities for Tigo Energy and Thor Industries
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Tigo and Thor is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Tigo Energy and Thor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Industries and Tigo Energy 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 Tigo Energy are associated (or correlated) with Thor Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Industries has no effect on the direction of Tigo Energy i.e., Tigo Energy and Thor Industries go up and down completely randomly.
Pair Corralation between Tigo Energy and Thor Industries
Given the investment horizon of 90 days Tigo Energy is expected to generate 3.62 times more return on investment than Thor Industries. However, Tigo Energy is 3.62 times more volatile than Thor Industries. It trades about -0.07 of its potential returns per unit of risk. Thor Industries is currently generating about -0.53 per unit of risk. If you would invest 102.00 in Tigo Energy on September 25, 2024 and sell it today you would lose (11.00) from holding Tigo Energy or give up 10.78% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Tigo Energy vs. Thor Industries
Performance |
Timeline |
Tigo Energy |
Thor Industries |
Tigo Energy and Thor Industries Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tigo Energy and Thor Industries
The main advantage of trading using opposite Tigo Energy and Thor Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tigo Energy position performs unexpectedly, Thor Industries 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 Thor Industries will offset losses from the drop in Thor Industries' long position.The idea behind Tigo Energy and Thor Industries 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.Thor Industries vs. Marine Products | Thor Industries vs. Malibu Boats | Thor Industries vs. Brunswick | Thor Industries vs. LCI Industries |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |