Correlation Between Ammo and Thor Industries

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

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

Diversification Opportunities for Ammo and Thor Industries

0.0

Correlation Coefficient

Ammo  Thor Industries

Pay attention - limited upside

The 3 months correlation between Ammo and Thor is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ammo Inc and Thor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Industries and Ammo 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 Ammo Inc 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 Ammo i.e., Ammo and Thor Industries go up and down completely randomly.

Pair Corralation between Ammo and Thor Industries

Given the investment horizon of 90 days Ammo Inc is expected to under-perform the Thor Industries. In addition to that, Ammo is 1.47 times more volatile than Thor Industries. It trades about -0.16 of its total potential returns per unit of risk. Thor Industries is currently generating about 0.05 per unit of volatility. If you would invest  10,589  in Thor Industries on June 30, 2024 and sell it today you would earn a total of  408.00  from holding Thor Industries or generate 3.85% return on investment over 90 days.

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

Ammo Inc  vs.  Thor Industries

Ammo Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ammo Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Thor Industries

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Thor Industries are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile technical indicators, Thor Industries displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ammo and Thor Industries

The main advantage of trading using opposite Ammo and Thor Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ammo 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 Ammo Inc 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.