Correlation Between Centene and Codexis

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

By analyzing existing cross correlation between Centene 3375 percent and Codexis, you can compare the effects of market volatilities on Centene 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 Centene with a short position of Codexis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centene and Codexis.

Diversification Opportunities for Centene and Codexis

-0.43

Correlation Coefficient

Centene  Codexis

Very good diversification

The 3 months correlation between Centene and Codexis is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Centene 3375 percent and Codexis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Codexis and Centene 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 Centene 3375 percent 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 Centene i.e., Centene and Codexis go up and down completely randomly.

Pair Corralation between Centene and Codexis

Assuming the 90 days trading horizon Centene 3375 percent is expected to under-perform the Codexis. But the bond apears to be less risky and, when comparing its historical volatility, Centene 3375 percent is 10.56 times less risky than Codexis. The bond trades about -0.01 of its potential returns per unit of risk. The Codexis is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  651.00  in Codexis on October 11, 2024 and sell it today you would lose (175.00) from holding Codexis or give up 26.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.19%
Values	Daily Returns

Centene 3375 percent  vs.  Codexis

Centene 3375 percent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Centene 3375 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for Centene 3375 percent investors.

Codexis

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Codexis are ranked lower than 13 (%) 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 Centene and Codexis

The main advantage of trading using opposite Centene and Codexis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centene 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 Centene 3375 percent 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.