Correlation Between Consilium Acquisition and Codexis

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

By analyzing existing cross correlation between Consilium Acquisition I and Codexis, you can compare the effects of market volatilities on Consilium Acquisition and Codexis 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 Consilium Acquisition with a short position of Codexis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consilium Acquisition and Codexis.

Diversification Opportunities for Consilium Acquisition and Codexis

-0.16

Correlation Coefficient

Consilium Acquisition  Codexis

Good diversification

The 3 months correlation between Consilium and Codexis is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Consilium Acquisition I and Codexis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Codexis and Consilium Acquisition 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 Consilium Acquisition I are associated (or correlated) with Codexis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Codexis has no effect on the direction of Consilium Acquisition i.e., Consilium Acquisition and Codexis go up and down completely randomly.

Pair Corralation between Consilium Acquisition and Codexis

Assuming the 90 days horizon Consilium Acquisition I is expected to under-perform the Codexis. But the stock apears to be less risky and, when comparing its historical volatility, Consilium Acquisition I is 3.18 times less risky than Codexis. The stock trades about -0.16 of its potential returns per unit of risk. The Codexis is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  281.00  in Codexis on September 5, 2024 and sell it today you would earn a total of  196.00  from holding Codexis or generate 69.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Consilium Acquisition I  vs.  Codexis

Consilium Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Consilium Acquisition I has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Codexis

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Codexis are ranked lower than 17 (%) 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.

Pair Trading with Consilium Acquisition and Codexis

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

The idea behind Consilium Acquisition I and Codexis 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.