Correlation Between Hudson Technologies and International Consolidated
Can any of the company-specific risk be diversified away by investing in both Hudson Technologies and International Consolidated 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 International Consolidated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hudson Technologies and International Consolidated Airlines, you can compare the effects of market volatilities on Hudson Technologies and International Consolidated 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 International Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hudson Technologies and International Consolidated.
Diversification Opportunities for Hudson Technologies and International Consolidated
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hudson and International is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Technologies and International Consolidated Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Consolidated 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 International Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Consolidated has no effect on the direction of Hudson Technologies i.e., Hudson Technologies and International Consolidated go up and down completely randomly.
Pair Corralation between Hudson Technologies and International Consolidated
Given the investment horizon of 90 days Hudson Technologies is expected to generate 1.02 times less return on investment than International Consolidated. In addition to that, Hudson Technologies is 1.57 times more volatile than International Consolidated Airlines. It trades about 0.09 of its total potential returns per unit of risk. International Consolidated Airlines is currently generating about 0.15 per unit of volatility. If you would invest 745.00 in International Consolidated Airlines on October 14, 2024 and sell it today you would earn a total of 23.00 from holding International Consolidated Airlines or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hudson Technologies vs. International Consolidated Air
Performance |
| Timeline |
| Hudson Technologies |
| International Consolidated |
Hudson Technologies and International Consolidated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hudson Technologies and International Consolidated
The main advantage of trading using opposite Hudson Technologies and International Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudson Technologies position performs unexpectedly, International Consolidated 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 International Consolidated will offset losses from the drop in International Consolidated's long position.| Hudson Technologies vs. Sensient Technologies | Hudson Technologies vs. Innospec | Hudson Technologies vs. H B Fuller | Hudson Technologies vs. Quaker Chemical |
| International Consolidated vs. Air France KLM SA | International Consolidated vs. Air France KLM | International Consolidated vs. Finnair Oyj | International Consolidated vs. AirAsia Group Berhad |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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