Correlation Between Capital Clean and Hudson Technologies
Can any of the company-specific risk be diversified away by investing in both Capital Clean and Hudson Technologies 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 Capital Clean and Hudson Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Clean Energy and Hudson Technologies, you can compare the effects of market volatilities on Capital Clean and Hudson Technologies 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 Capital Clean with a short position of Hudson Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Clean and Hudson Technologies.
Diversification Opportunities for Capital Clean and Hudson Technologies
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Capital and Hudson is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Capital Clean Energy and Hudson Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudson Technologies and Capital Clean 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 Capital Clean Energy are associated (or correlated) with Hudson Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hudson Technologies has no effect on the direction of Capital Clean i.e., Capital Clean and Hudson Technologies go up and down completely randomly.
Pair Corralation between Capital Clean and Hudson Technologies
Given the investment horizon of 90 days Capital Clean Energy is expected to under-perform the Hudson Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Capital Clean Energy is 1.15 times less risky than Hudson Technologies. The stock trades about -0.04 of its potential returns per unit of risk. The Hudson Technologies is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 540.00 in Hudson Technologies on October 28, 2024 and sell it today you would earn a total of 50.00 from holding Hudson Technologies or generate 9.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital Clean Energy vs. Hudson Technologies
Performance |
| Timeline |
| Capital Clean Energy |
| Hudson Technologies |
Capital Clean and Hudson Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Clean and Hudson Technologies
The main advantage of trading using opposite Capital Clean and Hudson Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Clean position performs unexpectedly, Hudson Technologies 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 Technologies will offset losses from the drop in Hudson Technologies' long position.| Capital Clean vs. Bm Technologies | Capital Clean vs. Merit Medical Systems | Capital Clean vs. RBC Bearings Incorporated | Capital Clean vs. Asure Software |
| Hudson Technologies vs. Sensient Technologies | Hudson Technologies vs. Innospec | Hudson Technologies vs. H B Fuller | Hudson Technologies vs. Quaker Chemical |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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