Correlation Between Codere Online and Soho House

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

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

Diversification Opportunities for Codere Online and Soho House

-0.59

Correlation Coefficient

Codere Online  Soho House

Excellent diversification

The 3 months correlation between Codere and Soho is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Codere Online Luxembourg and Soho House Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Soho House and Codere Online 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 Codere Online Luxembourg 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 Codere Online i.e., Codere Online and Soho House go up and down completely randomly.

Pair Corralation between Codere Online and Soho House

Assuming the 90 days horizon Codere Online Luxembourg is expected to under-perform the Soho House. In addition to that, Codere Online is 1.04 times more volatile than Soho House Co. It trades about -0.13 of its total potential returns per unit of risk. Soho House Co is currently generating about 0.14 per unit of volatility. If you would invest  545.00  in Soho House Co on October 9, 2024 and sell it today you would earn a total of  217.00  from holding Soho House Co or generate 39.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	92.31%
Values	Daily Returns

Codere Online Luxembourg  vs.  Soho House Co

Codere Online Luxembourg

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Codere Online Luxembourg has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Soho House

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Soho House Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Soho House displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Codere Online and Soho House

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

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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.