Correlation Between Codexis and StandardAero,

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

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

Diversification Opportunities for Codexis and StandardAero,

-0.09

Correlation Coefficient

Codexis  StandardAero,

Good diversification

The 3 months correlation between Codexis and StandardAero, is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Codexis and StandardAero, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on StandardAero, 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 StandardAero,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of StandardAero, has no effect on the direction of Codexis i.e., Codexis and StandardAero, go up and down completely randomly.

Pair Corralation between Codexis and StandardAero,

Given the investment horizon of 90 days Codexis is expected to generate 0.68 times more return on investment than StandardAero,. However, Codexis is 1.47 times less risky than StandardAero,. It trades about 0.2 of its potential returns per unit of risk. StandardAero, is currently generating about 0.09 per unit of risk. If you would invest  285.00  in Codexis on September 2, 2024 and sell it today you would earn a total of  173.00  from holding Codexis or generate 60.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	68.75%
Values	Daily Returns

Codexis  vs.  StandardAero,

Codexis

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Codexis are ranked lower than 16 (%) 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.

StandardAero,

Risk-Adjusted Performance

7 of 100

OK

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

Pair Trading with Codexis and StandardAero,

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

The idea behind Codexis and StandardAero, 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.