Correlation Between Intergroup and Soho House

Can any of the company-specific risk be diversified away by investing in both Intergroup 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 Intergroup and Soho House into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between The Intergroup and Soho House Co, you can compare the effects of market volatilities on Intergroup 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 Intergroup with a short position of Soho House. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intergroup and Soho House.

Diversification Opportunities for Intergroup and Soho House

0.22

Correlation Coefficient

Intergroup  Soho House

Modest diversification

The 3 months correlation between Intergroup and Soho is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding The Intergroup and Soho House Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soho House and Intergroup 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 The Intergroup 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 Intergroup i.e., Intergroup and Soho House go up and down completely randomly.

Pair Corralation between Intergroup and Soho House

Given the investment horizon of 90 days The Intergroup is expected to generate 1.61 times more return on investment than Soho House. However, Intergroup is 1.61 times more volatile than Soho House Co. It trades about 0.0 of its potential returns per unit of risk. Soho House Co is currently generating about -0.09 per unit of risk. If you would invest  2,279  in The Intergroup on February 4, 2024 and sell it today you would lose (44.00) from holding The Intergroup or give up 1.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

The Intergroup  vs.  Soho House Co

Intergroup

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Intergroup are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Intergroup is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Soho House

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Soho House Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in June 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Intergroup and Soho House

The main advantage of trading using opposite Intergroup and Soho House positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intergroup 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.

The idea behind The Intergroup and Soho House Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Global Correlations module to find global opportunities by holding instruments from different markets.