Correlation Between Worksport and Thor Industries

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

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

Diversification Opportunities for Worksport and Thor Industries

-0.43

Correlation Coefficient

Worksport  Thor Industries

Very good diversification

The 3 months correlation between Worksport and Thor is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Worksport and Thor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Industries and Worksport 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 Worksport 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 Worksport i.e., Worksport and Thor Industries go up and down completely randomly.

Pair Corralation between Worksport and Thor Industries

Given the investment horizon of 90 days Worksport is expected to generate 4.13 times more return on investment than Thor Industries. However, Worksport is 4.13 times more volatile than Thor Industries. It trades about 0.17 of its potential returns per unit of risk. Thor Industries is currently generating about -0.07 per unit of risk. If you would invest  43.00  in Worksport on September 25, 2024 and sell it today you would earn a total of  40.60  from holding Worksport or generate 94.42% return on investment over 90 days.

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

Worksport  vs.  Thor Industries

Worksport

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Worksport are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, Worksport reported solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Worksport and Thor Industries

The main advantage of trading using opposite Worksport and Thor Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Worksport 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 Worksport 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.