Correlation Between TH International and Flanigans Enterprises
Can any of the company-specific risk be diversified away by investing in both TH International and Flanigans Enterprises 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 TH International and Flanigans Enterprises into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TH International Limited and Flanigans Enterprises, you can compare the effects of market volatilities on TH International and Flanigans Enterprises 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 TH International with a short position of Flanigans Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of TH International and Flanigans Enterprises.
Diversification Opportunities for TH International and Flanigans Enterprises
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between THCH and Flanigans is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding TH International Limited and Flanigans Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flanigans Enterprises and TH International 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 TH International Limited are associated (or correlated) with Flanigans Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flanigans Enterprises has no effect on the direction of TH International i.e., TH International and Flanigans Enterprises go up and down completely randomly.
Pair Corralation between TH International and Flanigans Enterprises
Given the investment horizon of 90 days TH International Limited is expected to generate 9.12 times more return on investment than Flanigans Enterprises. However, TH International is 9.12 times more volatile than Flanigans Enterprises. It trades about 0.2 of its potential returns per unit of risk. Flanigans Enterprises is currently generating about -0.05 per unit of risk. If you would invest 69.00 in TH International Limited on September 2, 2024 and sell it today you would earn a total of 21.00 from holding TH International Limited or generate 30.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
TH International Limited vs. Flanigans Enterprises
Performance |
| Timeline |
| TH International |
| Flanigans Enterprises |
TH International and Flanigans Enterprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TH International and Flanigans Enterprises
The main advantage of trading using opposite TH International and Flanigans Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TH International position performs unexpectedly, Flanigans Enterprises 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 Flanigans Enterprises will offset losses from the drop in Flanigans Enterprises' long position.| TH International vs. Potbelly Co | TH International vs. El Pollo Loco | TH International vs. Dine Brands Global | TH International vs. One Group Hospitality |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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