Correlation Between Codexis and Consilium Acquisition

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

By analyzing existing cross correlation between Codexis and Consilium Acquisition I, you can compare the effects of market volatilities on Codexis and Consilium Acquisition 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 Codexis with a short position of Consilium Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Codexis and Consilium Acquisition.

Diversification Opportunities for Codexis and Consilium Acquisition

-0.16

Correlation Coefficient

Codexis  Consilium Acquisition

Good diversification

The 3 months correlation between Codexis and Consilium is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Codexis and Consilium Acquisition I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consilium Acquisition and Codexis 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 Codexis are associated (or correlated) with Consilium Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consilium Acquisition has no effect on the direction of Codexis i.e., Codexis and Consilium Acquisition go up and down completely randomly.

Pair Corralation between Codexis and Consilium Acquisition

Given the investment horizon of 90 days Codexis is expected to generate 3.21 times more return on investment than Consilium Acquisition. However, Codexis is 3.21 times more volatile than Consilium Acquisition I. It trades about 0.23 of its potential returns per unit of risk. Consilium Acquisition I is currently generating about -0.15 per unit of risk. If you would invest  281.00  in Codexis on September 5, 2024 and sell it today you would earn a total of  196.00  from holding Codexis or generate 69.75% return on investment over 90 days.

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

Codexis  vs.  Consilium Acquisition I

Codexis

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Codexis are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Codexis unveiled solid returns over the last few months and may actually be approaching a breakup point.

Consilium Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Consilium Acquisition I has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Codexis and Consilium Acquisition

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

The idea behind Codexis and Consilium Acquisition I 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.