Correlation Between Codere Online and International Game

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

Diversification Opportunities for Codere Online and International Game

0.24

Correlation Coefficient

Codere Online  International Game

Modest diversification

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

Pair Corralation between Codere Online and International Game

Given the investment horizon of 90 days Codere Online Corp is expected to generate 1.6 times more return on investment than International Game. However, Codere Online is 1.6 times more volatile than International Game Technology. It trades about 0.08 of its potential returns per unit of risk. International Game Technology is currently generating about -0.01 per unit of risk. If you would invest  766.00  in Codere Online Corp on September 5, 2024 and sell it today you would earn a total of  36.00  from holding Codere Online Corp or generate 4.7% 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.  International Game Technology

Codere Online Corp

Risk-Adjusted Performance

2 of 100

Weak

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

International Game

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Game Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Codere Online and International Game

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

The idea behind Codere Online Corp and International Game Technology 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.