Correlation Between Thor Industries and MYR

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

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

Diversification Opportunities for Thor Industries and MYR

-0.13

Correlation Coefficient

Thor Industries  MYR

Good diversification

The 3 months correlation between Thor and MYR is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Thor Industries and MYR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MYR Group 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 MYR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MYR Group has no effect on the direction of Thor Industries i.e., Thor Industries and MYR go up and down completely randomly.

Pair Corralation between Thor Industries and MYR

Considering the 90-day investment horizon Thor Industries is expected to generate 2.72 times less return on investment than MYR. But when comparing it to its historical volatility, Thor Industries is 1.62 times less risky than MYR. It trades about 0.03 of its potential returns per unit of risk. MYR Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  13,290  in MYR Group on September 27, 2024 and sell it today you would earn a total of  1,940  from holding MYR Group or generate 14.6% return on investment over 90 days.

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

Thor Industries  vs.  MYR Group

Thor Industries

Risk-Adjusted Performance

0 of 100

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 latest weak performance, the Stock's technical indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

MYR Group

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MYR Group are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, MYR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Thor Industries and MYR

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

The idea behind Thor Industries and MYR Group 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.