Correlation Between Thor Industries and QT Imaging

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

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

Diversification Opportunities for Thor Industries and QT Imaging

-0.22

Correlation Coefficient

Thor Industries  QT Imaging

Very good diversification

The 3 months correlation between Thor and QTI is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Thor Industries and QT Imaging Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QT Imaging Holdings 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 QT Imaging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QT Imaging Holdings has no effect on the direction of Thor Industries i.e., Thor Industries and QT Imaging go up and down completely randomly.

Pair Corralation between Thor Industries and QT Imaging

Considering the 90-day investment horizon Thor Industries is expected to generate 0.24 times more return on investment than QT Imaging. However, Thor Industries is 4.22 times less risky than QT Imaging. It trades about -0.13 of its potential returns per unit of risk. QT Imaging Holdings is currently generating about -0.06 per unit of risk. If you would invest  10,937  in Thor Industries on September 16, 2024 and sell it today you would lose (476.00) from holding Thor Industries or give up 4.35% of portfolio value over 90 days.

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

Thor Industries  vs.  QT Imaging Holdings

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.

QT Imaging Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days QT Imaging Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, QT Imaging is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Thor Industries and QT Imaging

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

The idea behind Thor Industries and QT Imaging Holdings 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 Anywhere module to track or share privately all of your investments from the convenience of any device.