Correlation Between Equillium and Codexis
Can any of the company-specific risk be diversified away by investing in both Equillium 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 Equillium and Codexis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equillium and Codexis, you can compare the effects of market volatilities on Equillium 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 Equillium with a short position of Codexis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equillium and Codexis.
Diversification Opportunities for Equillium and Codexis
Excellent diversification
The 3 months correlation between Equillium and Codexis is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Equillium and Codexis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Codexis and Equillium 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 Equillium 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 Equillium i.e., Equillium and Codexis go up and down completely randomly.
Pair Corralation between Equillium and Codexis
Allowing for the 90-day total investment horizon Equillium is expected to generate 1.2 times more return on investment than Codexis. However, Equillium is 1.2 times more volatile than Codexis. It trades about 0.02 of its potential returns per unit of risk. Codexis is currently generating about 0.02 per unit of risk. If you would invest 114.00 in Equillium on November 1, 2024 and sell it today you would lose (48.00) from holding Equillium or give up 42.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equillium vs. Codexis
Performance |
| Timeline |
| Equillium |
| Codexis |
Equillium and Codexis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equillium and Codexis
The main advantage of trading using opposite Equillium and Codexis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equillium 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.| Equillium vs. Lyra Therapeutics | Equillium vs. Hookipa Pharma | Equillium vs. Jasper Therapeutics | Equillium vs. Cingulate Warrants |
| Codexis vs. Agilent Technologies | Codexis vs. Equillium | Codexis vs. 23Andme Holding Co | Codexis vs. DiaMedica Therapeutics |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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