Correlation Between Thor Industries and HOLOGIC

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

By analyzing existing cross correlation between Thor Industries and HOLOGIC INC 325, you can compare the effects of market volatilities on Thor Industries and HOLOGIC 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 HOLOGIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thor Industries and HOLOGIC.

Diversification Opportunities for Thor Industries and HOLOGIC

0.63

Correlation Coefficient

Thor Industries  HOLOGIC

Poor diversification

The 3 months correlation between Thor and HOLOGIC is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Thor Industries and HOLOGIC INC 325 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOLOGIC INC 325 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 HOLOGIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HOLOGIC INC 325 has no effect on the direction of Thor Industries i.e., Thor Industries and HOLOGIC go up and down completely randomly.

Pair Corralation between Thor Industries and HOLOGIC

Considering the 90-day investment horizon Thor Industries is expected to under-perform the HOLOGIC. In addition to that, Thor Industries is 3.48 times more volatile than HOLOGIC INC 325. It trades about -0.09 of its total potential returns per unit of risk. HOLOGIC INC 325 is currently generating about -0.18 per unit of volatility. If you would invest  9,287  in HOLOGIC INC 325 on September 27, 2024 and sell it today you would lose (565.00) from holding HOLOGIC INC 325 or give up 6.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	92.19%
Values	Daily Returns

Thor Industries  vs.  HOLOGIC INC 325

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.

HOLOGIC INC 325

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HOLOGIC INC 325 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for HOLOGIC INC 325 investors.

Pair Trading with Thor Industries and HOLOGIC

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

The idea behind Thor Industries and HOLOGIC INC 325 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .