Correlation Between Tootsie Roll and Codan

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

By analyzing existing cross correlation between Tootsie Roll Industries and Codan Limited, you can compare the effects of market volatilities on Tootsie Roll and Codan 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 Tootsie Roll with a short position of Codan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tootsie Roll and Codan.

Diversification Opportunities for Tootsie Roll and Codan

0.0

Correlation Coefficient

Tootsie Roll  Codan

Pay attention - limited upside

The 3 months correlation between Tootsie and Codan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tootsie Roll Industries and Codan Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Codan Limited and Tootsie Roll 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 Tootsie Roll Industries are associated (or correlated) with Codan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Codan Limited has no effect on the direction of Tootsie Roll i.e., Tootsie Roll and Codan go up and down completely randomly.

Pair Corralation between Tootsie Roll and Codan

If you would invest  3,372  in Tootsie Roll Industries on May 18, 2025 and sell it today you would earn a total of  494.00  from holding Tootsie Roll Industries or generate 14.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Tootsie Roll Industries  vs.  Codan Limited

Tootsie Roll Industries

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Tootsie Roll Industries are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Tootsie Roll reported solid returns over the last few months and may actually be approaching a breakup point.

Codan Limited

Risk-Adjusted Performance

Weakest

Over the last 90 days Codan Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Codan is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Tootsie Roll and Codan

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

The idea behind Tootsie Roll Industries and Codan 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.