Correlation Between Hudson Technologies and Cars
Can any of the company-specific risk be diversified away by investing in both Hudson Technologies and Cars 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 Hudson Technologies and Cars into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hudson Technologies and Cars Inc, you can compare the effects of market volatilities on Hudson Technologies and Cars 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 Hudson Technologies with a short position of Cars. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hudson Technologies and Cars.
Diversification Opportunities for Hudson Technologies and Cars
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hudson and Cars is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Technologies and Cars Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cars Inc and Hudson Technologies 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 Hudson Technologies are associated (or correlated) with Cars. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cars Inc has no effect on the direction of Hudson Technologies i.e., Hudson Technologies and Cars go up and down completely randomly.
Pair Corralation between Hudson Technologies and Cars
Given the investment horizon of 90 days Hudson Technologies is expected to under-perform the Cars. In addition to that, Hudson Technologies is 1.37 times more volatile than Cars Inc. It trades about -0.09 of its total potential returns per unit of risk. Cars Inc is currently generating about 0.02 per unit of volatility. If you would invest 1,874 in Cars Inc on September 2, 2024 and sell it today you would earn a total of 113.00 from holding Cars Inc or generate 6.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hudson Technologies vs. Cars Inc
Performance |
| Timeline |
| Hudson Technologies |
| Cars Inc |
Hudson Technologies and Cars Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hudson Technologies and Cars
The main advantage of trading using opposite Hudson Technologies and Cars positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudson Technologies position performs unexpectedly, Cars 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 Cars will offset losses from the drop in Cars' long position.| 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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