Correlation Between Atmus Filtration and Codexis
Can any of the company-specific risk be diversified away by investing in both Atmus Filtration 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 Atmus Filtration and Codexis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atmus Filtration Technologies and Codexis, you can compare the effects of market volatilities on Atmus Filtration 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 Atmus Filtration with a short position of Codexis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atmus Filtration and Codexis.
Diversification Opportunities for Atmus Filtration and Codexis
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Atmus and Codexis is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Atmus Filtration Technologies and Codexis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Codexis and Atmus Filtration 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 Atmus Filtration Technologies 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 Atmus Filtration i.e., Atmus Filtration and Codexis go up and down completely randomly.
Pair Corralation between Atmus Filtration and Codexis
Given the investment horizon of 90 days Atmus Filtration Technologies is expected to under-perform the Codexis. But the stock apears to be less risky and, when comparing its historical volatility, Atmus Filtration Technologies is 3.39 times less risky than Codexis. The stock trades about -0.12 of its potential returns per unit of risk. The Codexis is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 402.00 in Codexis on September 13, 2024 and sell it today you would earn a total of 161.00 from holding Codexis or generate 40.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atmus Filtration Technologies vs. Codexis
Performance |
| Timeline |
| Atmus Filtration Tec |
| Codexis |
Atmus Filtration and Codexis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atmus Filtration and Codexis
The main advantage of trading using opposite Atmus Filtration and Codexis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atmus Filtration 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.| Atmus Filtration vs. Zurn Elkay Water | Atmus Filtration vs. Energy Recovery | Atmus Filtration vs. CECO Environmental Corp | Atmus Filtration vs. Federal Signal |
| Codexis vs. Molecular Partners AG | Codexis vs. MediciNova | Codexis vs. Anebulo Pharmaceuticals | Codexis vs. Shattuck Labs |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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