Correlation Between Huntsman Exploration and Hudson Resources
Can any of the company-specific risk be diversified away by investing in both Huntsman Exploration and Hudson Resources 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 Huntsman Exploration and Hudson Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huntsman Exploration and Hudson Resources, you can compare the effects of market volatilities on Huntsman Exploration and Hudson Resources 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 Huntsman Exploration with a short position of Hudson Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huntsman Exploration and Hudson Resources.
Diversification Opportunities for Huntsman Exploration and Hudson Resources
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Huntsman and Hudson is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Huntsman Exploration and Hudson Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudson Resources and Huntsman Exploration 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 Huntsman Exploration are associated (or correlated) with Hudson Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hudson Resources has no effect on the direction of Huntsman Exploration i.e., Huntsman Exploration and Hudson Resources go up and down completely randomly.
Pair Corralation between Huntsman Exploration and Hudson Resources
Assuming the 90 days horizon Huntsman Exploration is expected to under-perform the Hudson Resources. But the pink sheet apears to be less risky and, when comparing its historical volatility, Huntsman Exploration is 2.68 times less risky than Hudson Resources. The pink sheet trades about -0.21 of its potential returns per unit of risk. The Hudson Resources is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Hudson Resources on August 26, 2024 and sell it today you would earn a total of 0.00 from holding Hudson Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huntsman Exploration vs. Hudson Resources
Performance |
| Timeline |
| Huntsman Exploration |
| Hudson Resources |
Huntsman Exploration and Hudson Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huntsman Exploration and Hudson Resources
The main advantage of trading using opposite Huntsman Exploration and Hudson Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huntsman Exploration position performs unexpectedly, Hudson Resources 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 Hudson Resources will offset losses from the drop in Hudson Resources' long position.| Huntsman Exploration vs. Norra Metals Corp | Huntsman Exploration vs. ZincX Resources Corp | Huntsman Exploration vs. Nuinsco Resources Limited | Huntsman Exploration vs. South Star Battery |
| Hudson Resources vs. Ascendant Resources | Hudson Resources vs. Cantex Mine Development | Hudson Resources vs. Amarc Resources | Hudson Resources vs. Sterling Metals Corp |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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