Correlation Between Codere Online and Light Wonder

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

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

Diversification Opportunities for Codere Online and Light Wonder

0.44

Correlation Coefficient

Codere Online  Light Wonder

Very weak diversification

The 3 months correlation between Codere and Light is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Codere Online Corp and Light Wonder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Light Wonder 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 Corp are associated (or correlated) with Light Wonder. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Light Wonder has no effect on the direction of Codere Online i.e., Codere Online and Light Wonder go up and down completely randomly.

Pair Corralation between Codere Online and Light Wonder

Given the investment horizon of 90 days Codere Online Corp is expected to under-perform the Light Wonder. In addition to that, Codere Online is 1.22 times more volatile than Light Wonder. It trades about -0.07 of its total potential returns per unit of risk. Light Wonder is currently generating about 0.09 per unit of volatility. If you would invest  8,798  in Light Wonder on September 9, 2025 and sell it today you would earn a total of  1,102  from holding Light Wonder or generate 12.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Codere Online Corp  vs.  Light Wonder

Codere Online Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days Codere Online Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Light Wonder

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Light Wonder are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Light Wonder showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Codere Online and Light Wonder

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

The idea behind Codere Online Corp and Light Wonder 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.