Correlation Between Codexis and MicroStrategy Incorporated

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

By analyzing existing cross correlation between Codexis and MicroStrategy Incorporated 1000, you can compare the effects of market volatilities on Codexis and MicroStrategy Incorporated 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 MicroStrategy Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Codexis and MicroStrategy Incorporated.

Diversification Opportunities for Codexis and MicroStrategy Incorporated

0.74

Correlation Coefficient

Codexis  MicroStrategy Incorporated

Poor diversification

The 3 months correlation between Codexis and MicroStrategy is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Codexis and MicroStrategy Incorporated 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroStrategy Incorporated 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 MicroStrategy Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroStrategy Incorporated has no effect on the direction of Codexis i.e., Codexis and MicroStrategy Incorporated go up and down completely randomly.

Pair Corralation between Codexis and MicroStrategy Incorporated

Given the investment horizon of 90 days Codexis is expected to generate 2.6 times more return on investment than MicroStrategy Incorporated. However, Codexis is 2.6 times more volatile than MicroStrategy Incorporated 1000. It trades about 0.12 of its potential returns per unit of risk. MicroStrategy Incorporated 1000 is currently generating about 0.21 per unit of risk. If you would invest  233.00  in Codexis on April 26, 2025 and sell it today you would earn a total of  78.00  from holding Codexis or generate 33.48% return on investment over 90 days.

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

Codexis  vs.  MicroStrategy Incorporated 100

Codexis

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Codexis are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Codexis unveiled solid returns over the last few months and may actually be approaching a breakup point.

MicroStrategy Incorporated

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MicroStrategy Incorporated 1000 are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting basic indicators, MicroStrategy Incorporated reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Codexis and MicroStrategy Incorporated

The main advantage of trading using opposite Codexis and MicroStrategy Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Codexis position performs unexpectedly, MicroStrategy Incorporated 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 MicroStrategy Incorporated will offset losses from the drop in MicroStrategy Incorporated's long position.

The idea behind Codexis and MicroStrategy Incorporated 1000 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.