Correlation Between Catalyst Metals and Codexis

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

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

Diversification Opportunities for Catalyst Metals and Codexis

-0.87

Correlation Coefficient

Catalyst Metals  Codexis

Pay attention - limited upside

The 3 months correlation between Catalyst and Codexis is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Catalyst Metals Limited and Codexis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Codexis and Catalyst Metals 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 Catalyst Metals Limited 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 Catalyst Metals i.e., Catalyst Metals and Codexis go up and down completely randomly.

Pair Corralation between Catalyst Metals and Codexis

Assuming the 90 days horizon Catalyst Metals Limited is expected to generate 1.0 times more return on investment than Codexis. However, Catalyst Metals is 1.0 times more volatile than Codexis. It trades about 0.23 of its potential returns per unit of risk. Codexis is currently generating about -0.19 per unit of risk. If you would invest  165.00  in Catalyst Metals Limited on December 21, 2024 and sell it today you would earn a total of  142.00  from holding Catalyst Metals Limited or generate 86.06% return on investment over 90 days.

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

Catalyst Metals Limited  vs.  Codexis

Catalyst Metals

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Catalyst Metals Limited are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Catalyst Metals reported solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Catalyst Metals and Codexis

The main advantage of trading using opposite Catalyst Metals and Codexis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Catalyst Metals 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 Catalyst Metals Limited 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.