Correlation Between Yum China and Codere Online
Can any of the company-specific risk be diversified away by investing in both Yum China 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 Yum China and Codere Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yum China Holdings and Codere Online Corp, you can compare the effects of market volatilities on Yum China 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 Yum China with a short position of Codere Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yum China and Codere Online.
Diversification Opportunities for Yum China and Codere Online
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Yum and Codere is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Yum China Holdings 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 Yum China 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 Yum China Holdings 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 Yum China i.e., Yum China and Codere Online go up and down completely randomly.
Pair Corralation between Yum China and Codere Online
Given the investment horizon of 90 days Yum China Holdings is expected to generate 1.04 times more return on investment than Codere Online. However, Yum China is 1.04 times more volatile than Codere Online Corp. It trades about 0.04 of its potential returns per unit of risk. Codere Online Corp is currently generating about 0.03 per unit of risk. If you would invest 4,197 in Yum China Holdings on August 25, 2024 and sell it today you would earn a total of 510.00 from holding Yum China Holdings or generate 12.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yum China Holdings vs. Codere Online Corp
Performance |
| Timeline |
| Yum China Holdings |
| Codere Online Corp |
Yum China and Codere Online Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yum China and Codere Online
The main advantage of trading using opposite Yum China and Codere Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yum China 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.| Yum China vs. Darden Restaurants | Yum China vs. The Wendys Co | Yum China vs. Dominos Pizza | Yum China vs. Restaurant Brands International |
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 Stocks Directory module to find actively traded stocks across global markets.
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