Correlation Between Codexis and HUBBELL

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

By analyzing existing cross correlation between Codexis and HUBBELL INC 35, you can compare the effects of market volatilities on Codexis and HUBBELL 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 HUBBELL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Codexis and HUBBELL.

Diversification Opportunities for Codexis and HUBBELL

-0.72

Correlation Coefficient

Codexis  HUBBELL

Pay attention - limited upside

The 3 months correlation between Codexis and HUBBELL is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Codexis and HUBBELL INC 35 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUBBELL INC 35 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 HUBBELL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUBBELL INC 35 has no effect on the direction of Codexis i.e., Codexis and HUBBELL go up and down completely randomly.

Pair Corralation between Codexis and HUBBELL

Given the investment horizon of 90 days Codexis is expected to generate 6.93 times more return on investment than HUBBELL. However, Codexis is 6.93 times more volatile than HUBBELL INC 35. It trades about 0.26 of its potential returns per unit of risk. HUBBELL INC 35 is currently generating about -0.14 per unit of risk. If you would invest  285.00  in Codexis on September 14, 2024 and sell it today you would earn a total of  278.00  from holding Codexis or generate 97.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	88.89%
Values	Daily Returns

Codexis  vs.  HUBBELL INC 35

Codexis

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Codexis are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Codexis unveiled solid returns over the last few months and may actually be approaching a breakup point.

HUBBELL INC 35

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HUBBELL INC 35 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, HUBBELL is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Codexis and HUBBELL

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

The idea behind Codexis and HUBBELL INC 35 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.