Correlation Between Codere Online and Chanson International

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

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

Diversification Opportunities for Codere Online and Chanson International

-0.42

Correlation Coefficient

Codere Online  Chanson International

Very good diversification

The 3 months correlation between Codere and Chanson is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Codere Online Luxembourg and Chanson International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chanson International 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 Luxembourg are associated (or correlated) with Chanson International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chanson International has no effect on the direction of Codere Online i.e., Codere Online and Chanson International go up and down completely randomly.

Pair Corralation between Codere Online and Chanson International

Assuming the 90 days horizon Codere Online Luxembourg is expected to generate 0.57 times more return on investment than Chanson International. However, Codere Online Luxembourg is 1.75 times less risky than Chanson International. It trades about 0.02 of its potential returns per unit of risk. Chanson International Holding is currently generating about -0.22 per unit of risk. If you would invest  75.00  in Codere Online Luxembourg on December 20, 2024 and sell it today you would lose (5.00) from holding Codere Online Luxembourg or give up 6.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	88.33%
Values	Daily Returns

Codere Online Luxembourg  vs.  Chanson International Holding

Codere Online Luxembourg

Risk-Adjusted Performance

Weak

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

Chanson International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chanson International Holding 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 April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Codere Online and Chanson International

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

The idea behind Codere Online Luxembourg and Chanson International Holding 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.