Correlation Between International Game and Codere Online

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

By analyzing existing cross correlation between International Game Technology and Codere Online Corp, you can compare the effects of market volatilities on International Game and Codere Online 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 International Game with a short position of Codere Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Game and Codere Online.

Diversification Opportunities for International Game and Codere Online

0.64

Correlation Coefficient

International Game  Codere Online

Poor diversification

The 3 months correlation between International and Codere is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding International Game Technology and Codere Online Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Codere Online Corp and International Game 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 International Game Technology are associated (or correlated) with Codere Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Codere Online Corp has no effect on the direction of International Game i.e., International Game and Codere Online go up and down completely randomly.

Pair Corralation between International Game and Codere Online

Considering the 90-day investment horizon International Game Technology is expected to under-perform the Codere Online. But the stock apears to be less risky and, when comparing its historical volatility, International Game Technology is 2.13 times less risky than Codere Online. The stock trades about -0.14 of its potential returns per unit of risk. The Codere Online Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  795.00  in Codere Online Corp on December 2, 2024 and sell it today you would lose (3.00) from holding Codere Online Corp or give up 0.38% of portfolio value over 90 days.

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

International Game Technology  vs.  Codere Online Corp

International Game

Risk-Adjusted Performance

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 uncertain 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.

Codere Online Corp

Risk-Adjusted Performance

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 very healthy basic indicators, Codere Online is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with International Game and Codere Online

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

The idea behind International Game Technology and Codere Online Corp 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.