Correlation Between Lizhi and Codexis

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

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

Diversification Opportunities for Lizhi and Codexis

0.8

Correlation Coefficient

Lizhi  Codexis

Very poor diversification

The 3 months correlation between Lizhi and Codexis is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Lizhi Inc and Codexis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Codexis and Lizhi 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 Lizhi Inc 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 Lizhi i.e., Lizhi and Codexis go up and down completely randomly.

Pair Corralation between Lizhi and Codexis

Given the investment horizon of 90 days Lizhi Inc is expected to generate 3.17 times more return on investment than Codexis. However, Lizhi is 3.17 times more volatile than Codexis. It trades about 0.19 of its potential returns per unit of risk. Codexis is currently generating about 0.1 per unit of risk. If you would invest  127.00  in Lizhi Inc on May 19, 2025 and sell it today you would earn a total of  297.00  from holding Lizhi Inc or generate 233.86% return on investment over 90 days.

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

Lizhi Inc  vs.  Codexis

Lizhi Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lizhi Inc are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Lizhi reported solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with Lizhi and Codexis

The main advantage of trading using opposite Lizhi and Codexis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lizhi 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 Lizhi Inc 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.