Correlation Between Dana and Thor Industries

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

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

Diversification Opportunities for Dana and Thor Industries

0.64

Correlation Coefficient

Dana  Thor Industries

Poor diversification

The 3 months correlation between Dana and Thor is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Dana Inc and Thor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Industries and Dana 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 Dana 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 Dana i.e., Dana and Thor Industries go up and down completely randomly.

Pair Corralation between Dana and Thor Industries

Considering the 90-day investment horizon Dana is expected to generate 3.71 times less return on investment than Thor Industries. But when comparing it to its historical volatility, Dana Inc is 1.01 times less risky than Thor Industries. It trades about 0.06 of its potential returns per unit of risk. Thor Industries is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  7,340  in Thor Industries on May 7, 2025 and sell it today you would earn a total of  1,984  from holding Thor Industries or generate 27.03% return on investment over 90 days.

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

Dana Inc  vs.  Thor Industries

Dana Inc

Risk-Adjusted Performance

Insignificant

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

Thor Industries

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Thor Industries are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical indicators, Thor Industries displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dana and Thor Industries

The main advantage of trading using opposite Dana and Thor Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dana 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 Dana 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.