Correlation Between United Guardian and Codexis

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

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

Diversification Opportunities for United Guardian and Codexis

-0.06

Correlation Coefficient

United Guardian  Codexis

Good diversification

The 3 months correlation between United and Codexis is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding United Guardian and Codexis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Codexis and United Guardian 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 United Guardian 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 United Guardian i.e., United Guardian and Codexis go up and down completely randomly.

Pair Corralation between United Guardian and Codexis

Allowing for the 90-day total investment horizon United Guardian is expected to generate 0.34 times more return on investment than Codexis. However, United Guardian is 2.95 times less risky than Codexis. It trades about 0.03 of its potential returns per unit of risk. Codexis is currently generating about -0.11 per unit of risk. If you would invest  943.00  in United Guardian on December 25, 2024 and sell it today you would earn a total of  18.00  from holding United Guardian or generate 1.91% return on investment over 90 days.

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

United Guardian  vs.  Codexis

United Guardian

Risk-Adjusted Performance

Weak

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

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 United Guardian and Codexis

The main advantage of trading using opposite United Guardian and Codexis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Guardian 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 United Guardian 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.