Correlation Between Bt Brands and Codexis
Can any of the company-specific risk be diversified away by investing in both Bt Brands 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 Bt Brands and Codexis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bt Brands and Codexis, you can compare the effects of market volatilities on Bt Brands 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 Bt Brands with a short position of Codexis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bt Brands and Codexis.
Diversification Opportunities for Bt Brands and Codexis
Very good diversification
The 3 months correlation between BTBD and Codexis is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Bt Brands and Codexis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Codexis and Bt Brands 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 Bt Brands 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 Bt Brands i.e., Bt Brands and Codexis go up and down completely randomly.
Pair Corralation between Bt Brands and Codexis
Given the investment horizon of 90 days Bt Brands is expected to generate 5.8 times less return on investment than Codexis. But when comparing it to its historical volatility, Bt Brands is 1.1 times less risky than Codexis. It trades about 0.08 of its potential returns per unit of risk. Codexis is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 393.00 in Codexis on September 19, 2024 and sell it today you would earn a total of 168.00 from holding Codexis or generate 42.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bt Brands vs. Codexis
Performance |
| Timeline |
| Bt Brands |
| Codexis |
Bt Brands and Codexis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bt Brands and Codexis
The main advantage of trading using opposite Bt Brands and Codexis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bt Brands 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.| Bt Brands vs. Alsea SAB de | Bt Brands vs. Marstons PLC | Bt Brands vs. Bagger Daves Burger | Bt Brands vs. Marstons PLC |
| 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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