Correlation Between Hudson Technologies and Driven Brands
Can any of the company-specific risk be diversified away by investing in both Hudson Technologies and Driven Brands 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 Driven Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hudson Technologies and Driven Brands Holdings, you can compare the effects of market volatilities on Hudson Technologies and Driven Brands 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 Driven Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hudson Technologies and Driven Brands.
Diversification Opportunities for Hudson Technologies and Driven Brands
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hudson and Driven is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Technologies and Driven Brands Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Driven Brands Holdings 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 Driven Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Driven Brands Holdings has no effect on the direction of Hudson Technologies i.e., Hudson Technologies and Driven Brands go up and down completely randomly.
Pair Corralation between Hudson Technologies and Driven Brands
Given the investment horizon of 90 days Hudson Technologies is expected to generate 1.31 times more return on investment than Driven Brands. However, Hudson Technologies is 1.31 times more volatile than Driven Brands Holdings. It trades about 0.45 of its potential returns per unit of risk. Driven Brands Holdings is currently generating about -0.03 per unit of risk. If you would invest 529.00 in Hudson Technologies on October 24, 2024 and sell it today you would earn a total of 80.00 from holding Hudson Technologies or generate 15.12% 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. Driven Brands Holdings
Performance |
| Timeline |
| Hudson Technologies |
| Driven Brands Holdings |
Hudson Technologies and Driven Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hudson Technologies and Driven Brands
The main advantage of trading using opposite Hudson Technologies and Driven Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudson Technologies position performs unexpectedly, Driven Brands 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 Driven Brands will offset losses from the drop in Driven Brands' long position.| Hudson Technologies vs. Sensient Technologies | Hudson Technologies vs. Innospec | Hudson Technologies vs. H B Fuller | Hudson Technologies vs. Quaker Chemical |
| Driven Brands vs. CarGurus | Driven Brands vs. KAR Auction Services | Driven Brands vs. Kingsway Financial Services | Driven Brands vs. Group 1 Automotive |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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