Correlation Between Tamarack Valley and Codexis

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

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

Diversification Opportunities for Tamarack Valley and Codexis

0.73

Correlation Coefficient

Tamarack Valley  Codexis

Poor diversification

The 3 months correlation between Tamarack and Codexis is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Tamarack Valley Energy and Codexis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Codexis and Tamarack Valley 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 Tamarack Valley Energy 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 Tamarack Valley i.e., Tamarack Valley and Codexis go up and down completely randomly.

Pair Corralation between Tamarack Valley and Codexis

Assuming the 90 days horizon Tamarack Valley Energy is expected to generate 0.38 times more return on investment than Codexis. However, Tamarack Valley Energy is 2.67 times less risky than Codexis. It trades about 0.2 of its potential returns per unit of risk. Codexis is currently generating about 0.07 per unit of risk. If you would invest  322.00  in Tamarack Valley Energy on May 27, 2025 and sell it today you would earn a total of  74.00  from holding Tamarack Valley Energy or generate 22.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Tamarack Valley Energy  vs.  Codexis

Tamarack Valley Energy

Risk-Adjusted Performance

Solid

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

Codexis

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Codexis are ranked lower than 5 (%) 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 Tamarack Valley and Codexis

The main advantage of trading using opposite Tamarack Valley and Codexis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tamarack Valley 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 Tamarack Valley Energy 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.