Correlation Between MasterBrand and Soho House
Can any of the company-specific risk be diversified away by investing in both MasterBrand 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 MasterBrand and Soho House into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MasterBrand and Soho House Co, you can compare the effects of market volatilities on MasterBrand 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 MasterBrand with a short position of Soho House. Check out your portfolio center. Please also check ongoing floating volatility patterns of MasterBrand and Soho House.
Diversification Opportunities for MasterBrand and Soho House
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MasterBrand and Soho is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding MasterBrand and Soho House Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soho House and MasterBrand 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 MasterBrand 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 MasterBrand i.e., MasterBrand and Soho House go up and down completely randomly.
Pair Corralation between MasterBrand and Soho House
Considering the 90-day investment horizon MasterBrand is expected to generate 0.91 times more return on investment than Soho House. However, MasterBrand is 1.1 times less risky than Soho House. It trades about -0.06 of its potential returns per unit of risk. Soho House Co is currently generating about -0.18 per unit of risk. If you would invest 1,851 in MasterBrand on August 28, 2024 and sell it today you would lose (62.00) from holding MasterBrand or give up 3.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MasterBrand vs. Soho House Co
Performance |
| Timeline |
| MasterBrand |
| Soho House |
MasterBrand and Soho House Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MasterBrand and Soho House
The main advantage of trading using opposite MasterBrand and Soho House positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MasterBrand 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.| MasterBrand vs. Bassett Furniture Industries | MasterBrand vs. Ethan Allen Interiors | MasterBrand vs. Natuzzi SpA | MasterBrand vs. Flexsteel Industries |
| 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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