Correlation Between Codexis and Union Electric

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

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

Diversification Opportunities for Codexis and Union Electric

0.56

Correlation Coefficient

Codexis  Union Electric

Very weak diversification

The 3 months correlation between Codexis and Union is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Codexis and Union Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Union Electric 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 Union Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Union Electric has no effect on the direction of Codexis i.e., Codexis and Union Electric go up and down completely randomly.

Pair Corralation between Codexis and Union Electric

Given the investment horizon of 90 days Codexis is expected to generate 1.69 times more return on investment than Union Electric. However, Codexis is 1.69 times more volatile than Union Electric. It trades about 0.1 of its potential returns per unit of risk. Union Electric is currently generating about 0.06 per unit of risk. If you would invest  233.00  in Codexis on May 28, 2025 and sell it today you would earn a total of  56.00  from holding Codexis or generate 24.03% return on investment over 90 days.

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

Codexis  vs.  Union Electric

Codexis

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Codexis are ranked lower than 7 (%) 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.

Union Electric

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Union Electric are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain fundamental indicators, Union Electric may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Codexis and Union Electric

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

The idea behind Codexis and Union Electric 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.