Correlation Between Codexis and Stepan
Can any of the company-specific risk be diversified away by investing in both Codexis and Stepan 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 Stepan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Codexis and Stepan Company, you can compare the effects of market volatilities on Codexis and Stepan 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 Stepan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Codexis and Stepan.
Diversification Opportunities for Codexis and Stepan
Average diversification
The 3 months correlation between Codexis and Stepan is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Codexis and Stepan Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepan Company 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 Stepan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stepan Company has no effect on the direction of Codexis i.e., Codexis and Stepan go up and down completely randomly.
Pair Corralation between Codexis and Stepan
Given the investment horizon of 90 days Codexis is expected to generate 3.08 times more return on investment than Stepan. However, Codexis is 3.08 times more volatile than Stepan Company. It trades about 0.07 of its potential returns per unit of risk. Stepan Company is currently generating about -0.03 per unit of risk. If you would invest 306.00 in Codexis on September 12, 2024 and sell it today you would earn a total of 275.00 from holding Codexis or generate 89.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Codexis vs. Stepan Company
Performance |
Timeline |
Codexis |
Stepan Company |
Codexis and Stepan Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Codexis and Stepan
The main advantage of trading using opposite Codexis and Stepan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Codexis position performs unexpectedly, Stepan 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 Stepan will offset losses from the drop in Stepan's long position.Codexis vs. Nuvation Bio | Codexis vs. Lyell Immunopharma | Codexis vs. Century Therapeutics | Codexis vs. Generation Bio Co |
Stepan vs. LyondellBasell Industries NV | Stepan vs. International Flavors Fragrances | Stepan vs. Cabot | Stepan vs. Westlake Chemical |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing |