Correlation Between Codere Online and DraftKings

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

Diversification Opportunities for Codere Online and DraftKings

-0.52

Correlation Coefficient

Codere Online  DraftKings

Excellent diversification

The 3 months correlation between Codere and DraftKings is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Codere Online Luxembourg and DraftKings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DraftKings 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 DraftKings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DraftKings has no effect on the direction of Codere Online i.e., Codere Online and DraftKings go up and down completely randomly.

Pair Corralation between Codere Online and DraftKings

Assuming the 90 days horizon Codere Online Luxembourg is expected to under-perform the DraftKings. In addition to that, Codere Online is 2.42 times more volatile than DraftKings. It trades about -0.16 of its total potential returns per unit of risk. DraftKings is currently generating about -0.21 per unit of volatility. If you would invest  4,306  in DraftKings on September 27, 2024 and sell it today you would lose (462.50) from holding DraftKings or give up 10.74% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	90.91%
Values	Daily Returns

Codere Online Luxembourg  vs.  DraftKings

Codere Online Luxembourg

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Codere Online Luxembourg has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

DraftKings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Codere Online and DraftKings

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

The idea behind Codere Online Luxembourg and DraftKings 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.