Correlation Between Magnite and Codexis
Can any of the company-specific risk be diversified away by investing in both Magnite 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 Magnite and Codexis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magnite and Codexis, you can compare the effects of market volatilities on Magnite 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 Magnite with a short position of Codexis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magnite and Codexis.
Diversification Opportunities for Magnite and Codexis
Very poor diversification
The 3 months correlation between Magnite and Codexis is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Magnite and Codexis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Codexis and Magnite 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 Magnite 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 Magnite i.e., Magnite and Codexis go up and down completely randomly.
Pair Corralation between Magnite and Codexis
Given the investment horizon of 90 days Magnite is expected to under-perform the Codexis. But the stock apears to be less risky and, when comparing its historical volatility, Magnite is 1.53 times less risky than Codexis. The stock trades about -0.07 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 493.00 in Codexis on October 24, 2024 and sell it today you would earn a total of 12.00 from holding Codexis or generate 2.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Magnite vs. Codexis
Performance |
| Timeline |
| Magnite |
| Codexis |
Magnite and Codexis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magnite and Codexis
The main advantage of trading using opposite Magnite and Codexis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magnite 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.The idea behind Magnite and Codexis pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |