Correlation Between FitLife Brands, and Codexis

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

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

Diversification Opportunities for FitLife Brands, and Codexis

0.13

Correlation Coefficient

FitLife Brands,  Codexis

Average diversification

The 3 months correlation between FitLife and Codexis is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding FitLife Brands, Common and Codexis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Codexis and FitLife Brands, 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 FitLife Brands, Common 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 FitLife Brands, i.e., FitLife Brands, and Codexis go up and down completely randomly.

Pair Corralation between FitLife Brands, and Codexis

Given the investment horizon of 90 days FitLife Brands, is expected to generate 1.1 times less return on investment than Codexis. But when comparing it to its historical volatility, FitLife Brands, Common is 2.07 times less risky than Codexis. It trades about 0.07 of its potential returns per unit of risk. Codexis is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  426.00  in Codexis on September 17, 2024 and sell it today you would earn a total of  127.00  from holding Codexis or generate 29.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

FitLife Brands, Common  vs.  Codexis

FitLife Brands, Common

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FitLife Brands, Common are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, FitLife Brands, is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Codexis

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Codexis are ranked lower than 17 (%) 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 FitLife Brands, and Codexis

The main advantage of trading using opposite FitLife Brands, and Codexis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FitLife Brands, 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 FitLife Brands, Common 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.