Correlation Between Codexis and ProShares UltraShort
Can any of the company-specific risk be diversified away by investing in both Codexis and ProShares UltraShort 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 Codexis and ProShares UltraShort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Codexis and ProShares UltraShort Utilities, you can compare the effects of market volatilities on Codexis and ProShares UltraShort 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 Codexis with a short position of ProShares UltraShort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Codexis and ProShares UltraShort.
Diversification Opportunities for Codexis and ProShares UltraShort
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Codexis and ProShares is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Codexis and ProShares UltraShort Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares UltraShort and Codexis 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 Codexis are associated (or correlated) with ProShares UltraShort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares UltraShort has no effect on the direction of Codexis i.e., Codexis and ProShares UltraShort go up and down completely randomly.
Pair Corralation between Codexis and ProShares UltraShort
Given the investment horizon of 90 days Codexis is expected to generate 3.44 times more return on investment than ProShares UltraShort. However, Codexis is 3.44 times more volatile than ProShares UltraShort Utilities. It trades about 0.26 of its potential returns per unit of risk. ProShares UltraShort Utilities is currently generating about -0.59 per unit of risk. If you would invest 269.00 in Codexis on February 13, 2024 and sell it today you would earn a total of 93.00 from holding Codexis or generate 34.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Codexis vs. ProShares UltraShort Utilities
Performance |
| Timeline |
| Codexis |
| ProShares UltraShort |
Codexis and ProShares UltraShort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Codexis and ProShares UltraShort
The main advantage of trading using opposite Codexis and ProShares UltraShort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Codexis position performs unexpectedly, ProShares UltraShort 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 ProShares UltraShort will offset losses from the drop in ProShares UltraShort's long position.| Codexis vs. Nuvation Bio | Codexis vs. Lyell Immunopharma | Codexis vs. Century Therapeutics | Codexis vs. Generation BioCo |
| ProShares UltraShort vs. MicroSectors FANG Index | ProShares UltraShort vs. Direxion Daily Semiconductor | ProShares UltraShort vs. Direxion Daily Technology | ProShares UltraShort vs. MicroSectors Big Oil |
Check out your portfolio center.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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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