Correlation Between Codere Online and Big Lots

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

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

Diversification Opportunities for Codere Online and Big Lots

-0.53

Correlation Coefficient

Codere Online  Big Lots

Excellent diversification

The 3 months correlation between Codere and Big is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Codere Online Luxembourg and Big Lots in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Lots 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 Luxembourg are associated (or correlated) with Big Lots. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Lots has no effect on the direction of Codere Online i.e., Codere Online and Big Lots go up and down completely randomly.

Pair Corralation between Codere Online and Big Lots

Assuming the 90 days horizon Codere Online Luxembourg is expected to generate 1.81 times more return on investment than Big Lots. However, Codere Online is 1.81 times more volatile than Big Lots. It trades about 0.15 of its potential returns per unit of risk. Big Lots is currently generating about -0.03 per unit of risk. If you would invest  51.00  in Codere Online Luxembourg on March 8, 2024 and sell it today you would earn a total of  41.00  from holding Codere Online Luxembourg or generate 80.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	87.1%
Values	Daily Returns

Codere Online Luxembourg  vs.  Big Lots

Codere Online Luxembourg

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Codere Online Luxembourg are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Codere Online showed solid returns over the last few months and may actually be approaching a breakup point.

Big Lots

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Big Lots has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest sluggish performance, the Stock's forward indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Codere Online and Big Lots

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

The idea behind Codere Online Luxembourg and Big Lots 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.