Correlation Between Soho House and InterContinental
Can any of the company-specific risk be diversified away by investing in both Soho House and InterContinental 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 InterContinental 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 InterContinental Hotels Group, you can compare the effects of market volatilities on Soho House and InterContinental 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 InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Soho House and InterContinental.
Diversification Opportunities for Soho House and InterContinental
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Soho and InterContinental is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Soho House Co and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels 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 InterContinental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InterContinental Hotels has no effect on the direction of Soho House i.e., Soho House and InterContinental go up and down completely randomly.
Pair Corralation between Soho House and InterContinental
Given the investment horizon of 90 days Soho House Co is expected to under-perform the InterContinental. In addition to that, Soho House is 1.87 times more volatile than InterContinental Hotels Group. It trades about -0.05 of its total potential returns per unit of risk. InterContinental Hotels Group is currently generating about 0.36 per unit of volatility. If you would invest 11,205 in InterContinental Hotels Group on August 24, 2024 and sell it today you would earn a total of 1,172 from holding InterContinental Hotels Group or generate 10.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Soho House Co vs. InterContinental Hotels Group
Performance |
| Timeline |
| Soho House |
| InterContinental Hotels |
Soho House and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Soho House and InterContinental
The main advantage of trading using opposite Soho House and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Soho House position performs unexpectedly, InterContinental 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 InterContinental will offset losses from the drop in InterContinental's long position.| Soho House vs. Allient | Soho House vs. CVR Partners LP | Soho House vs. BioNTech SE | Soho House vs. Valneva SE ADR |
| InterContinental vs. Hyatt Hotels | InterContinental vs. Hilton Worldwide Holdings | InterContinental vs. Marriott International | InterContinental vs. Wyndham Hotels Resorts |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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