Correlation Between Hudson Technologies and Neo Concept
Can any of the company-specific risk be diversified away by investing in both Hudson Technologies and Neo Concept 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 Neo Concept into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hudson Technologies and Neo Concept International Group, you can compare the effects of market volatilities on Hudson Technologies and Neo Concept 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 Neo Concept. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hudson Technologies and Neo Concept.
Diversification Opportunities for Hudson Technologies and Neo Concept
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hudson and Neo is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Technologies and Neo Concept International Grou in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neo Concept Internat 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 Neo Concept. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neo Concept Internat has no effect on the direction of Hudson Technologies i.e., Hudson Technologies and Neo Concept go up and down completely randomly.
Pair Corralation between Hudson Technologies and Neo Concept
Given the investment horizon of 90 days Hudson Technologies is expected to under-perform the Neo Concept. But the stock apears to be less risky and, when comparing its historical volatility, Hudson Technologies is 4.03 times less risky than Neo Concept. The stock trades about -0.09 of its potential returns per unit of risk. The Neo Concept International Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 73.00 in Neo Concept International Group on September 3, 2024 and sell it today you would lose (20.00) from holding Neo Concept International Group or give up 27.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hudson Technologies vs. Neo Concept International Grou
Performance |
| Timeline |
| Hudson Technologies |
| Neo Concept Internat |
Hudson Technologies and Neo Concept Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hudson Technologies and Neo Concept
The main advantage of trading using opposite Hudson Technologies and Neo Concept positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudson Technologies position performs unexpectedly, Neo Concept 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 Neo Concept will offset losses from the drop in Neo Concept's long position.| Hudson Technologies vs. Sensient Technologies | Hudson Technologies vs. Innospec | Hudson Technologies vs. H B Fuller | Hudson Technologies vs. Quaker Chemical |
| Neo Concept vs. Akanda Corp | Neo Concept vs. Alvotech | Neo Concept vs. HUTCHMED DRC | Neo Concept vs. RadNet Inc |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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