Correlation Between Codexis and ZenaTech

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

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

Diversification Opportunities for Codexis and ZenaTech

0.85

Correlation Coefficient

Codexis  ZenaTech

Very poor diversification

The 3 months correlation between Codexis and ZenaTech is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Codexis and ZenaTech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZenaTech 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 ZenaTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZenaTech has no effect on the direction of Codexis i.e., Codexis and ZenaTech go up and down completely randomly.

Pair Corralation between Codexis and ZenaTech

Given the investment horizon of 90 days Codexis is expected to generate 0.45 times more return on investment than ZenaTech. However, Codexis is 2.25 times less risky than ZenaTech. It trades about -0.19 of its potential returns per unit of risk. ZenaTech is currently generating about -0.11 per unit of risk. If you would invest  493.00  in Codexis on December 22, 2024 and sell it today you would lose (238.00) from holding Codexis or give up 48.28% of portfolio value over 90 days.

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

Codexis  vs.  ZenaTech

Codexis

Risk-Adjusted Performance

Very Weak

Over the last 90 days Codexis has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

ZenaTech

Risk-Adjusted Performance

Very Weak

Over the last 90 days ZenaTech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Codexis and ZenaTech

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

The idea behind Codexis and ZenaTech 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.