Correlation Between Thor Explorations and FirstGroup PLC

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

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

Diversification Opportunities for Thor Explorations and FirstGroup PLC

0.89

Correlation Coefficient

Thor Explorations  FirstGroup PLC

Very poor diversification

The 3 months correlation between Thor and FirstGroup is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Thor Explorations and FirstGroup PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FirstGroup PLC and Thor Explorations 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 Explorations are associated (or correlated) with FirstGroup PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FirstGroup PLC has no effect on the direction of Thor Explorations i.e., Thor Explorations and FirstGroup PLC go up and down completely randomly.

Pair Corralation between Thor Explorations and FirstGroup PLC

Assuming the 90 days trading horizon Thor Explorations is expected to generate 1.48 times more return on investment than FirstGroup PLC. However, Thor Explorations is 1.48 times more volatile than FirstGroup PLC. It trades about 0.18 of its potential returns per unit of risk. FirstGroup PLC is currently generating about 0.27 per unit of risk. If you would invest  3,136  in Thor Explorations on April 24, 2025 and sell it today you would earn a total of  1,064  from holding Thor Explorations or generate 33.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.41%
Values	Daily Returns

Thor Explorations  vs.  FirstGroup PLC

Thor Explorations

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Thor Explorations are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Thor Explorations exhibited solid returns over the last few months and may actually be approaching a breakup point.

FirstGroup PLC

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in FirstGroup PLC are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, FirstGroup PLC exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Thor Explorations and FirstGroup PLC

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

The idea behind Thor Explorations and FirstGroup PLC 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.