Correlation Between Hudson Technologies and Ecolab
Can any of the company-specific risk be diversified away by investing in both Hudson Technologies and Ecolab 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 Ecolab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hudson Technologies and Ecolab Inc, you can compare the effects of market volatilities on Hudson Technologies and Ecolab 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 Ecolab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hudson Technologies and Ecolab.
Diversification Opportunities for Hudson Technologies and Ecolab
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hudson and Ecolab is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Technologies and Ecolab Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecolab 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 Ecolab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecolab Inc has no effect on the direction of Hudson Technologies i.e., Hudson Technologies and Ecolab go up and down completely randomly.
Pair Corralation between Hudson Technologies and Ecolab
Given the investment horizon of 90 days Hudson Technologies is expected to under-perform the Ecolab. In addition to that, Hudson Technologies is 1.48 times more volatile than Ecolab Inc. It trades about 0.0 of its total potential returns per unit of risk. Ecolab Inc is currently generating about 0.02 per unit of volatility. If you would invest 23,330 in Ecolab Inc on January 14, 2025 and sell it today you would earn a total of 202.00 from holding Ecolab Inc or generate 0.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hudson Technologies vs. Ecolab Inc
Performance |
| Timeline |
| Hudson Technologies |
| Ecolab Inc |
Hudson Technologies and Ecolab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hudson Technologies and Ecolab
The main advantage of trading using opposite Hudson Technologies and Ecolab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudson Technologies position performs unexpectedly, Ecolab 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 Ecolab will offset losses from the drop in Ecolab's long position.| Hudson Technologies vs. Sensient Technologies | Hudson Technologies vs. Innospec | Hudson Technologies vs. H B Fuller | Hudson Technologies vs. Quaker Chemical |
| Ecolab vs. Linde plc Ordinary | Ecolab vs. PPG Industries | Ecolab vs. Sherwin Williams Co | Ecolab 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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