Correlation Between Allient and Soho House
Can any of the company-specific risk be diversified away by investing in both Allient and Soho House 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 Allient and Soho House into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Allient and Soho House Co, you can compare the effects of market volatilities on Allient and Soho House 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 Allient with a short position of Soho House. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allient and Soho House.
Diversification Opportunities for Allient and Soho House
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Allient and Soho is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Allient and Soho House Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soho House and Allient 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 Allient are associated (or correlated) with Soho House. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Soho House has no effect on the direction of Allient i.e., Allient and Soho House go up and down completely randomly.
Pair Corralation between Allient and Soho House
Given the investment horizon of 90 days Allient is expected to under-perform the Soho House. But the stock apears to be less risky and, when comparing its historical volatility, Allient is 1.52 times less risky than Soho House. The stock trades about -0.02 of its potential returns per unit of risk. The Soho House Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 434.00 in Soho House Co on August 28, 2024 and sell it today you would earn a total of 67.00 from holding Soho House Co or generate 15.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Allient vs. Soho House Co
Performance |
| Timeline |
| Allient |
| Soho House |
Allient and Soho House Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allient and Soho House
The main advantage of trading using opposite Allient and Soho House positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allient position performs unexpectedly, Soho House 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 Soho House will offset losses from the drop in Soho House's long position.| Allient vs. Summa Silver Corp | Allient vs. Paysafe | Allient vs. Red Branch Technologies | Allient vs. Arrow Electronics |
| Soho House vs. CenterPoint Energy | Soho House vs. Southwest Gas Holdings | Soho House vs. Willamette Valley Vineyards | Soho House vs. Scandinavian Tobacco Group |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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