Correlation Between CODERE ONLINE and Collins Foods

Can any of the company-specific risk be diversified away by investing in both CODERE ONLINE and Collins 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 Collins 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 Collins Foods Limited, you can compare the effects of market volatilities on CODERE ONLINE and Collins 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 Collins Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of CODERE ONLINE and Collins Foods.

Diversification Opportunities for CODERE ONLINE and Collins Foods

0.53

Correlation Coefficient

CODERE ONLINE  Collins Foods

Very weak diversification

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

Pair Corralation between CODERE ONLINE and Collins Foods

Assuming the 90 days horizon CODERE ONLINE LUX is expected to generate 0.85 times more return on investment than Collins Foods. However, CODERE ONLINE LUX is 1.17 times less risky than Collins Foods. It trades about 0.11 of its potential returns per unit of risk. Collins Foods Limited is currently generating about 0.08 per unit of risk. If you would invest  610.00  in CODERE ONLINE LUX on April 20, 2025 and sell it today you would earn a total of  100.00  from holding CODERE ONLINE LUX or generate 16.39% return on investment over 90 days.

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

CODERE ONLINE LUX  vs.  Collins Foods Limited

CODERE ONLINE LUX

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CODERE ONLINE LUX are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CODERE ONLINE reported solid returns over the last few months and may actually be approaching a breakup point.

Collins Foods Limited

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Collins Foods Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Collins Foods reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CODERE ONLINE and Collins Foods

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

The idea behind CODERE ONLINE LUX and Collins Foods Limited 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.