Correlation Between Flanigans Enterprises and TH International
Can any of the company-specific risk be diversified away by investing in both Flanigans Enterprises 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 Flanigans Enterprises and TH International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flanigans Enterprises and TH International Limited, you can compare the effects of market volatilities on Flanigans Enterprises 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 Flanigans Enterprises with a short position of TH International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flanigans Enterprises and TH International.
Diversification Opportunities for Flanigans Enterprises and TH International
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Flanigans and THCH is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Flanigans Enterprises and TH International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TH International and Flanigans Enterprises 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 Flanigans Enterprises 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 Flanigans Enterprises i.e., Flanigans Enterprises and TH International go up and down completely randomly.
Pair Corralation between Flanigans Enterprises and TH International
Considering the 90-day investment horizon Flanigans Enterprises is expected to generate 17.59 times more return on investment than TH International. However, Flanigans Enterprises is 17.59 times more volatile than TH International Limited. It trades about 0.08 of its potential returns per unit of risk. TH International Limited is currently generating about 0.02 per unit of risk. If you would invest 2,704 in Flanigans Enterprises on September 3, 2024 and sell it today you would lose (229.00) from holding Flanigans Enterprises or give up 8.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 92.0% |
| Values | Daily Returns |
Flanigans Enterprises vs. TH International Limited
Performance |
| Timeline |
| Flanigans Enterprises |
| TH International |
Flanigans Enterprises and TH International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flanigans Enterprises and TH International
The main advantage of trading using opposite Flanigans Enterprises and TH International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flanigans Enterprises 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.| Flanigans Enterprises vs. Highway Holdings Limited | Flanigans Enterprises vs. QCR Holdings | Flanigans Enterprises vs. Partner Communications | Flanigans Enterprises vs. Acumen Pharmaceuticals |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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