Correlation Between DANAHER and Codexis

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

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

Diversification Opportunities for DANAHER and Codexis

-0.19

Correlation Coefficient

DANAHER  Codexis

Good diversification

The 3 months correlation between DANAHER and Codexis is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding DANAHER PORATION and Codexis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Codexis and DANAHER 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 DANAHER PORATION 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 DANAHER i.e., DANAHER and Codexis go up and down completely randomly.

Pair Corralation between DANAHER and Codexis

Assuming the 90 days trading horizon DANAHER PORATION is expected to generate 0.19 times more return on investment than Codexis. However, DANAHER PORATION is 5.39 times less risky than Codexis. It trades about 0.0 of its potential returns per unit of risk. Codexis is currently generating about -0.13 per unit of risk. If you would invest  6,002  in DANAHER PORATION on December 24, 2024 and sell it today you would lose (16.00) from holding DANAHER PORATION or give up 0.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.44%
Values	Daily Returns

DANAHER PORATION  vs.  Codexis

DANAHER PORATION

Risk-Adjusted Performance

Very Weak

Over the last 90 days DANAHER PORATION has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, DANAHER is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

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 DANAHER and Codexis

The main advantage of trading using opposite DANAHER and Codexis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DANAHER 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 DANAHER PORATION 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.