Correlation Between Alsea SAB and TH International
Can any of the company-specific risk be diversified away by investing in both Alsea SAB and TH International 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 Alsea SAB and TH International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alsea SAB de and TH International Limited, you can compare the effects of market volatilities on Alsea SAB and TH International 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 Alsea SAB with a short position of TH International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alsea SAB and TH International.
Diversification Opportunities for Alsea SAB and TH International
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alsea and THCH is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Alsea SAB de and TH International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TH International and Alsea SAB 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 Alsea SAB de are associated (or correlated) with TH International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TH International has no effect on the direction of Alsea SAB i.e., Alsea SAB and TH International go up and down completely randomly.
Pair Corralation between Alsea SAB and TH International
Assuming the 90 days horizon Alsea SAB de is expected to under-perform the TH International. But the pink sheet apears to be less risky and, when comparing its historical volatility, Alsea SAB de is 1.49 times less risky than TH International. The pink sheet trades about -0.11 of its potential returns per unit of risk. The TH International Limited is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 89.00 in TH International Limited on September 3, 2024 and sell it today you would lose (1.00) from holding TH International Limited or give up 1.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alsea SAB de vs. TH International Limited
Performance |
| Timeline |
| Alsea SAB de |
| TH International |
Alsea SAB and TH International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alsea SAB and TH International
The main advantage of trading using opposite Alsea SAB and TH International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alsea SAB position performs unexpectedly, TH International 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 TH International will offset losses from the drop in TH International's long position.| Alsea SAB vs. Marstons PLC | Alsea SAB vs. Bagger Daves Burger | Alsea SAB vs. Flanigans Enterprises | Alsea SAB vs. Ark Restaurants Corp |
| TH International vs. Highway Holdings Limited | TH International vs. QCR Holdings | TH International vs. Partner Communications | TH International vs. Acumen Pharmaceuticals |
Check out your portfolio center.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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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