Correlation Between GrowGeneration Corp and Codexis
Can any of the company-specific risk be diversified away by investing in both GrowGeneration Corp 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 GrowGeneration Corp and Codexis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GrowGeneration Corp and Codexis, you can compare the effects of market volatilities on GrowGeneration Corp 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 GrowGeneration Corp with a short position of Codexis. Check out your portfolio center. Please also check ongoing floating volatility patterns of GrowGeneration Corp and Codexis.
Diversification Opportunities for GrowGeneration Corp and Codexis
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GrowGeneration and Codexis is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding GrowGeneration Corp and Codexis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Codexis and GrowGeneration Corp 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 GrowGeneration Corp 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 GrowGeneration Corp i.e., GrowGeneration Corp and Codexis go up and down completely randomly.
Pair Corralation between GrowGeneration Corp and Codexis
Given the investment horizon of 90 days GrowGeneration Corp is expected to under-perform the Codexis. In addition to that, GrowGeneration Corp is 1.35 times more volatile than Codexis. It trades about -0.04 of its total potential returns per unit of risk. Codexis is currently generating about 0.36 per unit of volatility. If you would invest 350.00 in Codexis on September 2, 2024 and sell it today you would earn a total of 108.00 from holding Codexis or generate 30.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GrowGeneration Corp vs. Codexis
Performance |
| Timeline |
| GrowGeneration Corp |
| Codexis |
GrowGeneration Corp and Codexis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GrowGeneration Corp and Codexis
The main advantage of trading using opposite GrowGeneration Corp and Codexis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GrowGeneration Corp 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.| GrowGeneration Corp vs. Evgo Inc | GrowGeneration Corp vs. Ulta Beauty | GrowGeneration Corp vs. Best Buy Co | GrowGeneration Corp vs. RH |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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