Correlation Between Wingstop and Codere Online

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

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

Diversification Opportunities for Wingstop and Codere Online

0.53

Correlation Coefficient

Wingstop  Codere Online

Very weak diversification

The 3 months correlation between Wingstop and Codere is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Wingstop and Codere Online Luxembourg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Codere Online Luxembourg and Wingstop 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 Wingstop 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 Luxembourg has no effect on the direction of Wingstop i.e., Wingstop and Codere Online go up and down completely randomly.

Pair Corralation between Wingstop and Codere Online

Given the investment horizon of 90 days Wingstop is expected to generate 0.41 times more return on investment than Codere Online. However, Wingstop is 2.46 times less risky than Codere Online. It trades about -0.29 of its potential returns per unit of risk. Codere Online Luxembourg is currently generating about -0.16 per unit of risk. If you would invest  33,879  in Wingstop on September 27, 2024 and sell it today you would lose (4,704) from holding Wingstop or give up 13.88% of portfolio value over 90 days.

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

Wingstop  vs.  Codere Online Luxembourg

Wingstop

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wingstop has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

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.

Pair Trading with Wingstop and Codere Online

The main advantage of trading using opposite Wingstop and Codere Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wingstop 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 Wingstop and Codere Online Luxembourg 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.