Correlation Between Digi International and Codexis
Can any of the company-specific risk be diversified away by investing in both Digi International 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 Digi International and Codexis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digi International and Codexis, you can compare the effects of market volatilities on Digi International 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 Digi International with a short position of Codexis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digi International and Codexis.
Diversification Opportunities for Digi International and Codexis
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Digi and Codexis is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Digi International and Codexis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Codexis and Digi International 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 Digi International 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 Digi International i.e., Digi International and Codexis go up and down completely randomly.
Pair Corralation between Digi International and Codexis
Given the investment horizon of 90 days Digi International is expected to generate 13.59 times less return on investment than Codexis. But when comparing it to its historical volatility, Digi International is 2.11 times less risky than Codexis. It trades about 0.01 of its potential returns per unit of risk. Codexis is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 467.00 in Codexis on September 12, 2024 and sell it today you would earn a total of 100.00 from holding Codexis or generate 21.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Digi International vs. Codexis
Performance |
| Timeline |
| Digi International |
| Codexis |
Digi International and Codexis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Digi International and Codexis
The main advantage of trading using opposite Digi International and Codexis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digi International 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.| Digi International vs. Victory Integrity Smallmid Cap | Digi International vs. Hilton Worldwide Holdings | Digi International vs. NVIDIA | Digi International vs. JPMorgan Chase Co |
| Codexis vs. Nuvation Bio | Codexis vs. Lyell Immunopharma | Codexis vs. Century Therapeutics | Codexis vs. Generation Bio Co |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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