Correlation Between CODERE ONLINE and NISSIN FOODS

Can any of the company-specific risk be diversified away by investing in both CODERE ONLINE and NISSIN FOODS 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 NISSIN FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CODERE ONLINE LUX and NISSIN FOODS HLDGS, you can compare the effects of market volatilities on CODERE ONLINE and NISSIN FOODS 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 NISSIN FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CODERE ONLINE and NISSIN FOODS.

Diversification Opportunities for CODERE ONLINE and NISSIN FOODS

-0.63

Correlation Coefficient

CODERE ONLINE  NISSIN FOODS

Excellent diversification

The 3 months correlation between CODERE and NISSIN is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding CODERE ONLINE LUX and NISSIN FOODS HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NISSIN FOODS HLDGS 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 LUX are associated (or correlated) with NISSIN FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NISSIN FOODS HLDGS has no effect on the direction of CODERE ONLINE i.e., CODERE ONLINE and NISSIN FOODS go up and down completely randomly.

Pair Corralation between CODERE ONLINE and NISSIN FOODS

Assuming the 90 days horizon CODERE ONLINE LUX is expected to generate 1.92 times more return on investment than NISSIN FOODS. However, CODERE ONLINE is 1.92 times more volatile than NISSIN FOODS HLDGS. It trades about 0.04 of its potential returns per unit of risk. NISSIN FOODS HLDGS is currently generating about -0.19 per unit of risk. If you would invest  640.00  in CODERE ONLINE LUX on December 29, 2024 and sell it today you would earn a total of  35.00  from holding CODERE ONLINE LUX or generate 5.47% return on investment over 90 days.

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

CODERE ONLINE LUX  vs.  NISSIN FOODS HLDGS

CODERE ONLINE LUX

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CODERE ONLINE LUX are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, CODERE ONLINE may actually be approaching a critical reversion point that can send shares even higher in April 2025.

NISSIN FOODS HLDGS

Risk-Adjusted Performance

Very Weak

Over the last 90 days NISSIN FOODS HLDGS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with CODERE ONLINE and NISSIN FOODS

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

The idea behind CODERE ONLINE LUX and NISSIN FOODS HLDGS 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 Global Correlations module to find global opportunities by holding instruments from different markets.