Correlation Between GoHealth and Codexis
Can any of the company-specific risk be diversified away by investing in both GoHealth 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 GoHealth and Codexis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoHealth and Codexis, you can compare the effects of market volatilities on GoHealth 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 GoHealth with a short position of Codexis. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoHealth and Codexis.
Diversification Opportunities for GoHealth and Codexis
Poor diversification
The 3 months correlation between GoHealth and Codexis is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding GoHealth and Codexis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Codexis and GoHealth 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 GoHealth 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 GoHealth i.e., GoHealth and Codexis go up and down completely randomly.
Pair Corralation between GoHealth and Codexis
Given the investment horizon of 90 days GoHealth is expected to under-perform the Codexis. But the stock apears to be less risky and, when comparing its historical volatility, GoHealth is 1.41 times less risky than Codexis. The stock trades about -0.01 of its potential returns per unit of risk. The Codexis is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 256.00 in Codexis on August 31, 2024 and sell it today you would earn a total of 202.00 from holding Codexis or generate 78.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GoHealth vs. Codexis
Performance |
| Timeline |
| GoHealth |
| Codexis |
GoHealth and Codexis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoHealth and Codexis
The main advantage of trading using opposite GoHealth and Codexis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoHealth 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.| GoHealth vs. eHealth | GoHealth vs. Tian Ruixiang Holdings | GoHealth vs. Huize Holding | GoHealth vs. Selectquote |
| 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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