Correlation Between Light Wonder and Codere Online
Can any of the company-specific risk be diversified away by investing in both Light Wonder 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 Light Wonder and Codere Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Light Wonder and Codere Online Corp, you can compare the effects of market volatilities on Light Wonder 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 Light Wonder with a short position of Codere Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Light Wonder and Codere Online.
Diversification Opportunities for Light Wonder and Codere Online
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Light and Codere is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Light Wonder 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 Light Wonder 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 Light Wonder 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 Light Wonder i.e., Light Wonder and Codere Online go up and down completely randomly.
Pair Corralation between Light Wonder and Codere Online
Considering the 90-day investment horizon Light Wonder is expected to generate 0.6 times more return on investment than Codere Online. However, Light Wonder is 1.68 times less risky than Codere Online. It trades about -0.02 of its potential returns per unit of risk. Codere Online Corp is currently generating about -0.08 per unit of risk. If you would invest 9,137 in Light Wonder on October 20, 2024 and sell it today you would lose (133.00) from holding Light Wonder or give up 1.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Light Wonder vs. Codere Online Corp
Performance |
| Timeline |
| Light Wonder |
| Codere Online Corp |
Light Wonder and Codere Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Light Wonder and Codere Online
The main advantage of trading using opposite Light Wonder and Codere Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Light Wonder 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.| Light Wonder vs. Codere Online Corp | Light Wonder vs. Inspired Entertainment | Light Wonder vs. International Game Technology | Light Wonder vs. Accel Entertainment |
| Codere Online vs. Accel Entertainment | Codere Online vs. PlayAGS | Codere Online vs. Gambling Group | Codere Online vs. Canterbury Park Holding |
Check out your portfolio center.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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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