Correlation Between Hudson Technologies and Shift4 Payments
Can any of the company-specific risk be diversified away by investing in both Hudson Technologies and Shift4 Payments 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 Shift4 Payments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hudson Technologies and Shift4 Payments, you can compare the effects of market volatilities on Hudson Technologies and Shift4 Payments 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 Shift4 Payments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hudson Technologies and Shift4 Payments.
Diversification Opportunities for Hudson Technologies and Shift4 Payments
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hudson and Shift4 is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Technologies and Shift4 Payments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shift4 Payments 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 Shift4 Payments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shift4 Payments has no effect on the direction of Hudson Technologies i.e., Hudson Technologies and Shift4 Payments go up and down completely randomly.
Pair Corralation between Hudson Technologies and Shift4 Payments
Given the investment horizon of 90 days Hudson Technologies is expected to under-perform the Shift4 Payments. In addition to that, Hudson Technologies is 1.04 times more volatile than Shift4 Payments. It trades about -0.03 of its total potential returns per unit of risk. Shift4 Payments is currently generating about 0.07 per unit of volatility. If you would invest 5,010 in Shift4 Payments on August 23, 2024 and sell it today you would earn a total of 5,918 from holding Shift4 Payments or generate 118.12% 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. Shift4 Payments
Performance |
| Timeline |
| Hudson Technologies |
| Shift4 Payments |
Hudson Technologies and Shift4 Payments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hudson Technologies and Shift4 Payments
The main advantage of trading using opposite Hudson Technologies and Shift4 Payments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudson Technologies position performs unexpectedly, Shift4 Payments 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 Shift4 Payments will offset losses from the drop in Shift4 Payments' long position.| Hudson Technologies vs. Sensient Technologies | Hudson Technologies vs. Innospec | Hudson Technologies vs. H B Fuller | Hudson Technologies vs. Quaker Chemical |
| Shift4 Payments vs. SentinelOne | Shift4 Payments vs. Confluent | Shift4 Payments vs. Hashicorp | Shift4 Payments vs. MongoDB |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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