Correlation Between Codexis and SNDL

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

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

Diversification Opportunities for Codexis and SNDL

-0.52

Correlation Coefficient

Codexis  SNDL

Excellent diversification

The 3 months correlation between Codexis and SNDL is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Codexis and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc 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 SNDL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNDL Inc has no effect on the direction of Codexis i.e., Codexis and SNDL go up and down completely randomly.

Pair Corralation between Codexis and SNDL

Given the investment horizon of 90 days Codexis is expected to generate 1.47 times more return on investment than SNDL. However, Codexis is 1.47 times more volatile than SNDL Inc. It trades about 0.29 of its potential returns per unit of risk. SNDL Inc is currently generating about -0.05 per unit of risk. If you would invest  273.00  in Codexis on September 12, 2024 and sell it today you would earn a total of  307.50  from holding Codexis or generate 112.64% return on investment over 90 days.

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

Codexis  vs.  SNDL Inc

Codexis

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Codexis are ranked lower than 22 (%) 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.

SNDL Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SNDL Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Codexis and SNDL

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

The idea behind Codexis and SNDL Inc 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 CEOs Directory module to screen CEOs from public companies around the world.