Correlation Between Codexis and Sorrento Therape
Can any of the company-specific risk be diversified away by investing in both Codexis and Sorrento Therape 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 Sorrento Therape into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Codexis and Sorrento Therape, you can compare the effects of market volatilities on Codexis and Sorrento Therape 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 Sorrento Therape. Check out your portfolio center. Please also check ongoing floating volatility patterns of Codexis and Sorrento Therape.
Diversification Opportunities for Codexis and Sorrento Therape
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Codexis and Sorrento is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Codexis and Sorrento Therape in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sorrento Therape 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 Sorrento Therape. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sorrento Therape has no effect on the direction of Codexis i.e., Codexis and Sorrento Therape go up and down completely randomly.
Pair Corralation between Codexis and Sorrento Therape
Given the investment horizon of 90 days Codexis is expected to generate 0.18 times more return on investment than Sorrento Therape. However, Codexis is 5.5 times less risky than Sorrento Therape. It trades about 0.36 of its potential returns per unit of risk. Sorrento Therape is currently generating about -0.05 per unit of risk. If you would invest 406.00 in Codexis on September 12, 2024 and sell it today you would earn a total of 161.00 from holding Codexis or generate 39.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Codexis vs. Sorrento Therape
Performance |
| Timeline |
| Codexis |
| Sorrento Therape |
Codexis and Sorrento Therape Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Codexis and Sorrento Therape
The main advantage of trading using opposite Codexis and Sorrento Therape positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Codexis position performs unexpectedly, Sorrento Therape 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 Sorrento Therape will offset losses from the drop in Sorrento Therape's long position.| Codexis vs. Nuvation Bio | Codexis vs. Lyell Immunopharma | Codexis vs. Century Therapeutics | Codexis vs. Generation Bio Co |
| Sorrento Therape vs. Enersys | Sorrento Therape vs. FactSet Research Systems | Sorrento Therape vs. ServiceNow | Sorrento Therape vs. Datadog |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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