Correlation Between Codexis and Cintas

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

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

Diversification Opportunities for Codexis and Cintas

-0.23

Correlation Coefficient

Codexis  Cintas

Very good diversification

The 3 months correlation between Codexis and Cintas is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Codexis and Cintas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cintas and Codexis 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 Codexis are associated (or correlated) with Cintas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cintas has no effect on the direction of Codexis i.e., Codexis and Cintas go up and down completely randomly.

Pair Corralation between Codexis and Cintas

Given the investment horizon of 90 days Codexis is expected to generate 1.51 times less return on investment than Cintas. In addition to that, Codexis is 4.31 times more volatile than Cintas. It trades about 0.02 of its total potential returns per unit of risk. Cintas is currently generating about 0.1 per unit of volatility. If you would invest  10,716  in Cintas on October 11, 2024 and sell it today you would earn a total of  8,549  from holding Cintas or generate 79.78% return on investment over 90 days.

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

Codexis  vs.  Cintas

Codexis

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Codexis are ranked lower than 13 (%) 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.

Cintas

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cintas has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Codexis and Cintas

The main advantage of trading using opposite Codexis and Cintas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Codexis position performs unexpectedly, Cintas 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 Cintas will offset losses from the drop in Cintas' long position.

The idea behind Codexis and Cintas 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.