Correlation Between Choice Hotels and Soho House
Can any of the company-specific risk be diversified away by investing in both Choice Hotels 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 Choice Hotels and Soho House into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Choice Hotels International and Soho House Co, you can compare the effects of market volatilities on Choice Hotels 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 Choice Hotels with a short position of Soho House. Check out your portfolio center. Please also check ongoing floating volatility patterns of Choice Hotels and Soho House.
Diversification Opportunities for Choice Hotels and Soho House
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Choice and Soho is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Choice Hotels International and Soho House Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soho House and Choice Hotels 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 Choice Hotels International 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 Choice Hotels i.e., Choice Hotels and Soho House go up and down completely randomly.
Pair Corralation between Choice Hotels and Soho House
Considering the 90-day investment horizon Choice Hotels International is expected to generate 0.47 times more return on investment than Soho House. However, Choice Hotels International is 2.15 times less risky than Soho House. It trades about 0.35 of its potential returns per unit of risk. Soho House Co is currently generating about -0.11 per unit of risk. If you would invest 14,084 in Choice Hotels International on August 28, 2024 and sell it today you would earn a total of 1,189 from holding Choice Hotels International or generate 8.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Choice Hotels International vs. Soho House Co
Performance |
| Timeline |
| Choice Hotels Intern |
| Soho House |
Choice Hotels and Soho House Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Choice Hotels and Soho House
The main advantage of trading using opposite Choice Hotels and Soho House positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Choice Hotels 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.| Choice Hotels vs. Yatra Online | Choice Hotels vs. Mondee Holdings | Choice Hotels vs. TripAdvisor | Choice Hotels vs. Thayer Ventures Acquisition |
| 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |