Correlation Between Spring Valley and Thor Industries

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

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

Diversification Opportunities for Spring Valley and Thor Industries

0.56

Correlation Coefficient

Spring Valley  Thor Industries

Very weak diversification

The 3 months correlation between Spring and Thor is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Spring Valley Acquisition and Thor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Industries and Spring Valley 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 Spring Valley Acquisition 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 Spring Valley i.e., Spring Valley and Thor Industries go up and down completely randomly.

Pair Corralation between Spring Valley and Thor Industries

Assuming the 90 days horizon Spring Valley Acquisition is expected to generate 9.65 times more return on investment than Thor Industries. However, Spring Valley is 9.65 times more volatile than Thor Industries. It trades about 0.21 of its potential returns per unit of risk. Thor Industries is currently generating about 0.16 per unit of risk. If you would invest  9.95  in Spring Valley Acquisition on May 10, 2025 and sell it today you would earn a total of  17.05  from holding Spring Valley Acquisition or generate 171.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	73.77%
Values	Daily Returns

Spring Valley Acquisition  vs.  Thor Industries

Spring Valley Acquisition

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Spring Valley Acquisition are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak forward indicators, Spring Valley reported solid returns over the last few months and may actually be approaching a breakup point.

Thor Industries

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Thor Industries are ranked lower than 12 (%) 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 Spring Valley and Thor Industries

The main advantage of trading using opposite Spring Valley and Thor Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spring Valley 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 Spring Valley Acquisition 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.