Correlation Between Hudson Technologies and Hawkins
Can any of the company-specific risk be diversified away by investing in both Hudson Technologies and Hawkins 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 Hawkins into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hudson Technologies and Hawkins, you can compare the effects of market volatilities on Hudson Technologies and Hawkins 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 Hawkins. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hudson Technologies and Hawkins.
Diversification Opportunities for Hudson Technologies and Hawkins
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hudson and Hawkins is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Technologies and Hawkins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawkins 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 Hawkins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawkins has no effect on the direction of Hudson Technologies i.e., Hudson Technologies and Hawkins go up and down completely randomly.
Pair Corralation between Hudson Technologies and Hawkins
Given the investment horizon of 90 days Hudson Technologies is expected to under-perform the Hawkins. In addition to that, Hudson Technologies is 1.3 times more volatile than Hawkins. It trades about -0.03 of its total potential returns per unit of risk. Hawkins is currently generating about 0.12 per unit of volatility. If you would invest 4,004 in Hawkins on August 28, 2024 and sell it today you would earn a total of 9,543 from holding Hawkins or generate 238.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hudson Technologies vs. Hawkins
Performance |
| Timeline |
| Hudson Technologies |
| Hawkins |
Hudson Technologies and Hawkins Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hudson Technologies and Hawkins
The main advantage of trading using opposite Hudson Technologies and Hawkins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudson Technologies position performs unexpectedly, Hawkins 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 Hawkins will offset losses from the drop in Hawkins' long position.| Hudson Technologies vs. Sensient Technologies | Hudson Technologies vs. Innospec | Hudson Technologies vs. H B Fuller | Hudson Technologies vs. Quaker Chemical |
| Hawkins vs. H B Fuller | Hawkins vs. Minerals Technologies | Hawkins vs. Quaker Chemical | Hawkins vs. Oil Dri |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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