Correlation Between Hudson Technologies and Chemours
Can any of the company-specific risk be diversified away by investing in both Hudson Technologies and Chemours 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 Chemours into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hudson Technologies and Chemours Co, you can compare the effects of market volatilities on Hudson Technologies and Chemours 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 Chemours. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hudson Technologies and Chemours.
Diversification Opportunities for Hudson Technologies and Chemours
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hudson and Chemours is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Technologies and Chemours Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chemours 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 Chemours. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chemours has no effect on the direction of Hudson Technologies i.e., Hudson Technologies and Chemours go up and down completely randomly.
Pair Corralation between Hudson Technologies and Chemours
Given the investment horizon of 90 days Hudson Technologies is expected to under-perform the Chemours. But the stock apears to be less risky and, when comparing its historical volatility, Hudson Technologies is 1.09 times less risky than Chemours. The stock trades about -0.03 of its potential returns per unit of risk. The Chemours Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 2,807 in Chemours Co on August 28, 2024 and sell it today you would lose (613.00) from holding Chemours Co or give up 21.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hudson Technologies vs. Chemours Co
Performance |
| Timeline |
| Hudson Technologies |
| Chemours |
Hudson Technologies and Chemours Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hudson Technologies and Chemours
The main advantage of trading using opposite Hudson Technologies and Chemours positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudson Technologies position performs unexpectedly, Chemours 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 Chemours will offset losses from the drop in Chemours' long position.| Hudson Technologies vs. Sensient Technologies | Hudson Technologies vs. Innospec | Hudson Technologies vs. H B Fuller | Hudson Technologies vs. Quaker Chemical |
| Chemours vs. Olin Corporation | Chemours vs. Cabot | Chemours vs. Kronos Worldwide | Chemours vs. LyondellBasell Industries NV |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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