Correlation Between Ainsworth Game and Codexis

Can any of the company-specific risk be diversified away by investing in both Ainsworth Game 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 Ainsworth Game and Codexis into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ainsworth Game Technology and Codexis, you can compare the effects of market volatilities on Ainsworth Game 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 Ainsworth Game with a short position of Codexis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ainsworth Game and Codexis.

Diversification Opportunities for Ainsworth Game and Codexis

0.03

Correlation Coefficient

Ainsworth Game  Codexis

Significant diversification

The 3 months correlation between Ainsworth and Codexis is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ainsworth Game Technology and Codexis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Codexis and Ainsworth Game 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 Ainsworth Game Technology 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 Ainsworth Game i.e., Ainsworth Game and Codexis go up and down completely randomly.

Pair Corralation between Ainsworth Game and Codexis

Assuming the 90 days horizon Ainsworth Game Technology is expected to under-perform the Codexis. But the pink sheet apears to be less risky and, when comparing its historical volatility, Ainsworth Game Technology is 1.53 times less risky than Codexis. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Codexis is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  298.00  in Codexis on October 13, 2024 and sell it today you would earn a total of  141.00  from holding Codexis or generate 47.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Ainsworth Game Technology  vs.  Codexis

Ainsworth Game Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ainsworth Game Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Ainsworth Game is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Codexis

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Codexis are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Codexis unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ainsworth Game and Codexis

The main advantage of trading using opposite Ainsworth Game and Codexis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ainsworth Game 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 Ainsworth Game Technology 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.

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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.