Correlation Between Codexis and Hawkins

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

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

Diversification Opportunities for Codexis and Hawkins

0.56

Correlation Coefficient

Codexis  Hawkins

Very weak diversification

The 3 months correlation between Codexis and Hawkins is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Codexis and Hawkins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawkins 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 Hawkins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawkins has no effect on the direction of Codexis i.e., Codexis and Hawkins go up and down completely randomly.

Pair Corralation between Codexis and Hawkins

Given the investment horizon of 90 days Codexis is expected to generate 1.64 times more return on investment than Hawkins. However, Codexis is 1.64 times more volatile than Hawkins. It trades about 0.25 of its potential returns per unit of risk. Hawkins is currently generating about 0.12 per unit of risk. If you would invest  274.00  in Codexis on September 6, 2024 and sell it today you would earn a total of  215.00  from holding Codexis or generate 78.47% return on investment over 90 days.

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

Codexis  vs.  Hawkins

Codexis

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Codexis are ranked lower than 19 (%) 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.

Hawkins

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hawkins are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting forward-looking signals, Hawkins displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Codexis and Hawkins

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

The idea behind Codexis and Hawkins 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.