Correlation Between Sodexo PK and Arhaus

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

By analyzing existing cross correlation between Sodexo PK and Arhaus Inc, you can compare the effects of market volatilities on Sodexo PK and Arhaus 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 Sodexo PK with a short position of Arhaus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sodexo PK and Arhaus.

Diversification Opportunities for Sodexo PK and Arhaus

0.0

Correlation Coefficient

Sodexo PK  Arhaus

Pay attention - limited upside

The 3 months correlation between Sodexo and Arhaus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sodexo PK and Arhaus Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arhaus Inc and Sodexo PK 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 Sodexo PK are associated (or correlated) with Arhaus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arhaus Inc has no effect on the direction of Sodexo PK i.e., Sodexo PK and Arhaus go up and down completely randomly.

Pair Corralation between Sodexo PK and Arhaus

If you would invest  928.00  in Arhaus Inc on December 29, 2024 and sell it today you would earn a total of  10.00  from holding Arhaus Inc or generate 1.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Sodexo PK  vs.  Arhaus Inc

Sodexo PK

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sodexo PK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Sodexo PK is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Arhaus Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Arhaus Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical indicators, Arhaus may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Sodexo PK and Arhaus

The main advantage of trading using opposite Sodexo PK and Arhaus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sodexo PK position performs unexpectedly, Arhaus 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 Arhaus will offset losses from the drop in Arhaus' long position.

The idea behind Sodexo PK and Arhaus Inc 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.