Correlation Between Codere Online and Playmaker Capital

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

Diversification Opportunities for Codere Online and Playmaker Capital

-0.37

Correlation Coefficient

Codere Online  Playmaker Capital

Very good diversification

The 3 months correlation between Codere and Playmaker is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Codere Online Corp and Playmaker Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playmaker Capital 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 Playmaker Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playmaker Capital has no effect on the direction of Codere Online i.e., Codere Online and Playmaker Capital go up and down completely randomly.

Pair Corralation between Codere Online and Playmaker Capital

Given the investment horizon of 90 days Codere Online Corp is expected to generate 1.52 times more return on investment than Playmaker Capital. However, Codere Online is 1.52 times more volatile than Playmaker Capital. It trades about 0.07 of its potential returns per unit of risk. Playmaker Capital is currently generating about 0.01 per unit of risk. If you would invest  258.00  in Codere Online Corp on September 20, 2024 and sell it today you would earn a total of  445.00  from holding Codere Online Corp or generate 172.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	28.23%
Values	Daily Returns

Codere Online Corp  vs.  Playmaker Capital

Codere Online Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Codere Online Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Playmaker Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Playmaker Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Playmaker Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Codere Online and Playmaker Capital

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

The idea behind Codere Online Corp and Playmaker Capital 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.