Correlation Between Thor Industries and Twin Vee

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

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

Diversification Opportunities for Thor Industries and Twin Vee

0.02

Correlation Coefficient

Thor Industries  Twin Vee

Significant diversification

The 3 months correlation between Thor and Twin is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Thor Industries and Twin Vee Powercats in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Twin Vee Powercats 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 Twin Vee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Twin Vee Powercats has no effect on the direction of Thor Industries i.e., Thor Industries and Twin Vee go up and down completely randomly.

Pair Corralation between Thor Industries and Twin Vee

Considering the 90-day investment horizon Thor Industries is expected to generate 0.48 times more return on investment than Twin Vee. However, Thor Industries is 2.09 times less risky than Twin Vee. It trades about 0.15 of its potential returns per unit of risk. Twin Vee Powercats is currently generating about -0.18 per unit of risk. If you would invest  10,498  in Thor Industries on September 3, 2024 and sell it today you would earn a total of  662.00  from holding Thor Industries or generate 6.31% 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.  Twin Vee Powercats

Thor Industries

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Thor Industries are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical indicators, Thor Industries may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Twin Vee Powercats

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Twin Vee Powercats are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal technical and fundamental indicators, Twin Vee exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Thor Industries and Twin Vee

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

The idea behind Thor Industries and Twin Vee Powercats 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.