Correlation Between Codere Online and Gambling

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

By analyzing existing cross correlation between Codere Online Corp and Gambling Group, you can compare the effects of market volatilities on Codere Online and Gambling 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 Gambling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Codere Online and Gambling.

Diversification Opportunities for Codere Online and Gambling

0.24

Correlation Coefficient

Codere Online  Gambling

Modest diversification

The 3 months correlation between Codere and Gambling is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Codere Online Corp and Gambling Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gambling Group 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 Corp are associated (or correlated) with Gambling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gambling Group has no effect on the direction of Codere Online i.e., Codere Online and Gambling go up and down completely randomly.

Pair Corralation between Codere Online and Gambling

Given the investment horizon of 90 days Codere Online Corp is expected to generate 0.98 times more return on investment than Gambling. However, Codere Online Corp is 1.02 times less risky than Gambling. It trades about 0.1 of its potential returns per unit of risk. Gambling Group is currently generating about -0.05 per unit of risk. If you would invest  629.00  in Codere Online Corp on December 29, 2024 and sell it today you would earn a total of  105.00  from holding Codere Online Corp or generate 16.69% return on investment over 90 days.

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

Codere Online Corp  vs.  Gambling Group

Codere Online Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Codere Online Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Codere Online displayed solid returns over the last few months and may actually be approaching a breakup point.

Gambling Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gambling Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's primary indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Codere Online and Gambling

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

The idea behind Codere Online Corp and Gambling 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.

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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.