Correlation Between Soho House and Huazhu

Can any of the company-specific risk be diversified away by investing in both Soho House and Huazhu 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 Huazhu 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 Huazhu Group, you can compare the effects of market volatilities on Soho House and Huazhu 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 Huazhu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Soho House and Huazhu.

Diversification Opportunities for Soho House and Huazhu

-0.41

Correlation Coefficient

Soho House  Huazhu

Very good diversification

The 3 months correlation between Soho and Huazhu is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Soho House Co and Huazhu Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huazhu Group 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 Huazhu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huazhu Group has no effect on the direction of Soho House i.e., Soho House and Huazhu go up and down completely randomly.

Pair Corralation between Soho House and Huazhu

Given the investment horizon of 90 days Soho House Co is expected to generate 1.6 times more return on investment than Huazhu. However, Soho House is 1.6 times more volatile than Huazhu Group. It trades about 0.03 of its potential returns per unit of risk. Huazhu Group is currently generating about -0.14 per unit of risk. If you would invest  633.00  in Soho House Co on May 7, 2025 and sell it today you would earn a total of  18.00  from holding Soho House Co or generate 2.84% 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.  Huazhu Group

Soho House

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Soho House Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Soho House is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Huazhu Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Huazhu Group 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 technical indicators remain comparatively stable which may send shares a bit higher in September 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Soho House and Huazhu

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

The idea behind Soho House Co and Huazhu Group 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.