Correlation Between Codexis and NETGEAR
Can any of the company-specific risk be diversified away by investing in both Codexis and NETGEAR 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 NETGEAR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Codexis and NETGEAR, you can compare the effects of market volatilities on Codexis and NETGEAR 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 NETGEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Codexis and NETGEAR.
Diversification Opportunities for Codexis and NETGEAR
Very poor diversification
The 3 months correlation between Codexis and NETGEAR is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Codexis and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR 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 NETGEAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NETGEAR has no effect on the direction of Codexis i.e., Codexis and NETGEAR go up and down completely randomly.
Pair Corralation between Codexis and NETGEAR
Given the investment horizon of 90 days Codexis is expected to generate 2.28 times more return on investment than NETGEAR. However, Codexis is 2.28 times more volatile than NETGEAR. It trades about 0.41 of its potential returns per unit of risk. NETGEAR is currently generating about 0.44 per unit of risk. If you would invest 318.00 in Codexis on August 28, 2024 and sell it today you would earn a total of 137.00 from holding Codexis or generate 43.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Codexis vs. NETGEAR
Performance |
| Timeline |
| Codexis |
| NETGEAR |
Codexis and NETGEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Codexis and NETGEAR
The main advantage of trading using opposite Codexis and NETGEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Codexis position performs unexpectedly, NETGEAR 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 NETGEAR will offset losses from the drop in NETGEAR's long position.| Codexis vs. Nuvation Bio | Codexis vs. Lyell Immunopharma | Codexis vs. Century Therapeutics | Codexis vs. Generation Bio Co |
| NETGEAR vs. KVH Industries | NETGEAR vs. Ituran Location and | NETGEAR vs. Aviat Networks | NETGEAR vs. Mynaric AG ADR |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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