Correlation Between Hudson Technologies and Knife River
Can any of the company-specific risk be diversified away by investing in both Hudson Technologies and Knife River 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 Knife River into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hudson Technologies and Knife River, you can compare the effects of market volatilities on Hudson Technologies and Knife River 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 Knife River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hudson Technologies and Knife River.
Diversification Opportunities for Hudson Technologies and Knife River
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hudson and Knife is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Technologies and Knife River in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knife River 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 Knife River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knife River has no effect on the direction of Hudson Technologies i.e., Hudson Technologies and Knife River go up and down completely randomly.
Pair Corralation between Hudson Technologies and Knife River
Given the investment horizon of 90 days Hudson Technologies is expected to under-perform the Knife River. In addition to that, Hudson Technologies is 1.33 times more volatile than Knife River. It trades about -0.1 of its total potential returns per unit of risk. Knife River is currently generating about 0.15 per unit of volatility. If you would invest 7,044 in Knife River on September 14, 2024 and sell it today you would earn a total of 3,529 from holding Knife River or generate 50.1% 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. Knife River
Performance |
| Timeline |
| Hudson Technologies |
| Knife River |
Hudson Technologies and Knife River Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hudson Technologies and Knife River
The main advantage of trading using opposite Hudson Technologies and Knife River positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudson Technologies position performs unexpectedly, Knife River 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 Knife River will offset losses from the drop in Knife River's long position.| Hudson Technologies vs. Sensient Technologies | Hudson Technologies vs. Innospec | Hudson Technologies vs. H B Fuller | Hudson Technologies vs. Quaker Chemical |
| Knife River vs. Sphere Entertainment Co | Knife River vs. Weibo Corp | Knife River vs. Radcom | Knife River vs. Plexus Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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