Correlation Between TH International and Kura Sushi
Can any of the company-specific risk be diversified away by investing in both TH International and Kura Sushi 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 Kura Sushi 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 Kura Sushi USA, you can compare the effects of market volatilities on TH International and Kura Sushi 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 Kura Sushi. Check out your portfolio center. Please also check ongoing floating volatility patterns of TH International and Kura Sushi.
Diversification Opportunities for TH International and Kura Sushi
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between THCH and Kura is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding TH International Limited and Kura Sushi USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kura Sushi USA 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 Kura Sushi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kura Sushi USA has no effect on the direction of TH International i.e., TH International and Kura Sushi go up and down completely randomly.
Pair Corralation between TH International and Kura Sushi
Given the investment horizon of 90 days TH International Limited is expected to generate 1.67 times more return on investment than Kura Sushi. However, TH International is 1.67 times more volatile than Kura Sushi USA. It trades about 0.2 of its potential returns per unit of risk. Kura Sushi USA is currently generating about 0.09 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TH International Limited vs. Kura Sushi USA
Performance |
| Timeline |
| TH International |
| Kura Sushi USA |
TH International and Kura Sushi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TH International and Kura Sushi
The main advantage of trading using opposite TH International and Kura Sushi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TH International position performs unexpectedly, Kura Sushi 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 Kura Sushi will offset losses from the drop in Kura Sushi's 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 |
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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