Correlation Between Codexis and X-FAB Silicon
Can any of the company-specific risk be diversified away by investing in both Codexis and X-FAB Silicon 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 X-FAB Silicon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Codexis and X FAB Silicon Foundries, you can compare the effects of market volatilities on Codexis and X-FAB Silicon 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 X-FAB Silicon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Codexis and X-FAB Silicon.
Diversification Opportunities for Codexis and X-FAB Silicon
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Codexis and X-FAB is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Codexis and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 X-FAB Silicon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of Codexis i.e., Codexis and X-FAB Silicon go up and down completely randomly.
Pair Corralation between Codexis and X-FAB Silicon
Given the investment horizon of 90 days Codexis is expected to generate 1.36 times less return on investment than X-FAB Silicon. In addition to that, Codexis is 1.37 times more volatile than X FAB Silicon Foundries. It trades about 0.08 of its total potential returns per unit of risk. X FAB Silicon Foundries is currently generating about 0.16 per unit of volatility. If you would invest 449.00 in X FAB Silicon Foundries on October 26, 2024 and sell it today you would earn a total of 89.00 from holding X FAB Silicon Foundries or generate 19.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.5% |
| Values | Daily Returns |
Codexis vs. X FAB Silicon Foundries
Performance |
| Timeline |
| Codexis |
| X FAB Silicon |
Codexis and X-FAB Silicon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Codexis and X-FAB Silicon
The main advantage of trading using opposite Codexis and X-FAB Silicon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Codexis position performs unexpectedly, X-FAB Silicon 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 X-FAB Silicon will offset losses from the drop in X-FAB Silicon's long position.| Codexis vs. Nuvation Bio | Codexis vs. Lyell Immunopharma | Codexis vs. Century Therapeutics | Codexis vs. Generation Bio Co |
| X-FAB Silicon vs. NVIDIA | X-FAB Silicon vs. Intel | X-FAB Silicon vs. Taiwan Semiconductor Manufacturing | X-FAB Silicon vs. Marvell Technology Group |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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