Correlation Between Hudson Technologies and Dana
Can any of the company-specific risk be diversified away by investing in both Hudson Technologies and Dana 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 Dana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hudson Technologies and Dana Inc, you can compare the effects of market volatilities on Hudson Technologies and Dana 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 Dana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hudson Technologies and Dana.
Diversification Opportunities for Hudson Technologies and Dana
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hudson and Dana is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Technologies and Dana Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dana 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 Dana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dana Inc has no effect on the direction of Hudson Technologies i.e., Hudson Technologies and Dana go up and down completely randomly.
Pair Corralation between Hudson Technologies and Dana
Given the investment horizon of 90 days Hudson Technologies is expected to under-perform the Dana. In addition to that, Hudson Technologies is 1.19 times more volatile than Dana Inc. It trades about -0.03 of its total potential returns per unit of risk. Dana Inc is currently generating about -0.02 per unit of volatility. If you would invest 1,411 in Dana Inc on August 31, 2024 and sell it today you would lose (411.00) from holding Dana Inc or give up 29.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hudson Technologies vs. Dana Inc
Performance |
| Timeline |
| Hudson Technologies |
| Dana Inc |
Hudson Technologies and Dana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hudson Technologies and Dana
The main advantage of trading using opposite Hudson Technologies and Dana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudson Technologies position performs unexpectedly, Dana 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 Dana will offset losses from the drop in Dana's 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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