Correlation Between EON Resources and Codexis

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

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

Diversification Opportunities for EON Resources and Codexis

-0.79

Correlation Coefficient

EON Resources  Codexis

Pay attention - limited upside

The 3 months correlation between EON and Codexis is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding EON Resources and Codexis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Codexis and EON Resources 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 EON Resources 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 EON Resources i.e., EON Resources and Codexis go up and down completely randomly.

Pair Corralation between EON Resources and Codexis

Given the investment horizon of 90 days EON Resources is expected to under-perform the Codexis. In addition to that, EON Resources is 2.37 times more volatile than Codexis. It trades about -0.01 of its total potential returns per unit of risk. Codexis is currently generating about 0.08 per unit of volatility. If you would invest  198.00  in Codexis on September 26, 2024 and sell it today you would earn a total of  302.00  from holding Codexis or generate 152.53% return on investment over 90 days.

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

EON Resources  vs.  Codexis

EON Resources

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in EON Resources are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, EON Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Codexis

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Codexis are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Codexis unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EON Resources and Codexis

The main advantage of trading using opposite EON Resources and Codexis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EON Resources 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 EON Resources 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.