Correlation Between Soho House and Hilton Worldwide
Can any of the company-specific risk be diversified away by investing in both Soho House and Hilton Worldwide 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 Soho House and Hilton Worldwide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Soho House Co and Hilton Worldwide Holdings, you can compare the effects of market volatilities on Soho House and Hilton Worldwide 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 Soho House with a short position of Hilton Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Soho House and Hilton Worldwide.
Diversification Opportunities for Soho House and Hilton Worldwide
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Soho and Hilton is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Soho House Co and Hilton Worldwide Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hilton Worldwide Holdings and Soho House 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 Soho House Co are associated (or correlated) with Hilton Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hilton Worldwide Holdings has no effect on the direction of Soho House i.e., Soho House and Hilton Worldwide go up and down completely randomly.
Pair Corralation between Soho House and Hilton Worldwide
Given the investment horizon of 90 days Soho House Co is expected to under-perform the Hilton Worldwide. In addition to that, Soho House is 2.39 times more volatile than Hilton Worldwide Holdings. It trades about -0.06 of its total potential returns per unit of risk. Hilton Worldwide Holdings is currently generating about 0.18 per unit of volatility. If you would invest 23,422 in Hilton Worldwide Holdings on August 28, 2024 and sell it today you would earn a total of 1,941 from holding Hilton Worldwide Holdings or generate 8.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Soho House Co vs. Hilton Worldwide Holdings
Performance |
| Timeline |
| Soho House |
| Hilton Worldwide Holdings |
Soho House and Hilton Worldwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Soho House and Hilton Worldwide
The main advantage of trading using opposite Soho House and Hilton Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Soho House position performs unexpectedly, Hilton Worldwide 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 Hilton Worldwide will offset losses from the drop in Hilton Worldwide's long position.| Soho House vs. CenterPoint Energy | Soho House vs. Southwest Gas Holdings | Soho House vs. Willamette Valley Vineyards | Soho House vs. Scandinavian Tobacco Group |
| Hilton Worldwide vs. Hyatt Hotels | Hilton Worldwide vs. Wyndham Hotels Resorts | Hilton Worldwide vs. Choice Hotels International | Hilton Worldwide vs. InterContinental Hotels 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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