Correlation Between Hudson Technologies and Hooker Furniture
Can any of the company-specific risk be diversified away by investing in both Hudson Technologies and Hooker Furniture 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 Hooker Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hudson Technologies and Hooker Furniture, you can compare the effects of market volatilities on Hudson Technologies and Hooker Furniture 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 Hooker Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hudson Technologies and Hooker Furniture.
Diversification Opportunities for Hudson Technologies and Hooker Furniture
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hudson and Hooker is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Technologies and Hooker Furniture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hooker Furniture 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 Hooker Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hooker Furniture has no effect on the direction of Hudson Technologies i.e., Hudson Technologies and Hooker Furniture go up and down completely randomly.
Pair Corralation between Hudson Technologies and Hooker Furniture
Given the investment horizon of 90 days Hudson Technologies is expected to under-perform the Hooker Furniture. In addition to that, Hudson Technologies is 1.04 times more volatile than Hooker Furniture. It trades about -0.09 of its total potential returns per unit of risk. Hooker Furniture is currently generating about -0.01 per unit of volatility. If you would invest 2,256 in Hooker Furniture on September 4, 2024 and sell it today you would lose (370.00) from holding Hooker Furniture or give up 16.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hudson Technologies vs. Hooker Furniture
Performance |
| Timeline |
| Hudson Technologies |
| Hooker Furniture |
Hudson Technologies and Hooker Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hudson Technologies and Hooker Furniture
The main advantage of trading using opposite Hudson Technologies and Hooker Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudson Technologies position performs unexpectedly, Hooker Furniture 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 Hooker Furniture will offset losses from the drop in Hooker Furniture's long position.| Hudson Technologies vs. Sensient Technologies | Hudson Technologies vs. Innospec | Hudson Technologies vs. H B Fuller | Hudson Technologies vs. Quaker Chemical |
| Hooker Furniture vs. Bassett Furniture Industries | Hooker Furniture vs. Natuzzi SpA | Hooker Furniture vs. Flexsteel Industries | Hooker Furniture vs. Hamilton Beach Brands |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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