Correlation Between DIH Holdings and Codexis

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

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

Diversification Opportunities for DIH Holdings and Codexis

-0.46

Correlation Coefficient

DIH Holdings  Codexis

Very good diversification

The 3 months correlation between DIH and Codexis is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding DIH Holdings US, and Codexis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Codexis and DIH Holdings 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 DIH Holdings US, 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 DIH Holdings i.e., DIH Holdings and Codexis go up and down completely randomly.

Pair Corralation between DIH Holdings and Codexis

Given the investment horizon of 90 days DIH Holdings US, is expected to under-perform the Codexis. In addition to that, DIH Holdings is 1.74 times more volatile than Codexis. It trades about -0.05 of its total potential returns per unit of risk. Codexis is currently generating about 0.24 per unit of volatility. If you would invest  311.00  in Codexis on September 18, 2024 and sell it today you would earn a total of  250.00  from holding Codexis or generate 80.39% return on investment over 90 days.

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

DIH Holdings US,  vs.  Codexis

DIH Holdings US,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DIH Holdings US, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Codexis

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Codexis are ranked lower than 18 (%) 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 DIH Holdings and Codexis

The main advantage of trading using opposite DIH Holdings and Codexis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DIH Holdings 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 DIH Holdings US, 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.