Correlation Between Hudson Technologies and PennantPark Investment
Can any of the company-specific risk be diversified away by investing in both Hudson Technologies and PennantPark Investment 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 PennantPark Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hudson Technologies and PennantPark Investment, you can compare the effects of market volatilities on Hudson Technologies and PennantPark Investment 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 PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hudson Technologies and PennantPark Investment.
Diversification Opportunities for Hudson Technologies and PennantPark Investment
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hudson and PennantPark is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Technologies and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Investment 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 PennantPark Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennantPark Investment has no effect on the direction of Hudson Technologies i.e., Hudson Technologies and PennantPark Investment go up and down completely randomly.
Pair Corralation between Hudson Technologies and PennantPark Investment
Given the investment horizon of 90 days Hudson Technologies is expected to under-perform the PennantPark Investment. In addition to that, Hudson Technologies is 4.39 times more volatile than PennantPark Investment. It trades about -0.19 of its total potential returns per unit of risk. PennantPark Investment is currently generating about 0.13 per unit of volatility. If you would invest 656.00 in PennantPark Investment on September 3, 2024 and sell it today you would earn a total of 21.00 from holding PennantPark Investment or generate 3.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hudson Technologies vs. PennantPark Investment
Performance |
| Timeline |
| Hudson Technologies |
| PennantPark Investment |
Hudson Technologies and PennantPark Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hudson Technologies and PennantPark Investment
The main advantage of trading using opposite Hudson Technologies and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudson Technologies position performs unexpectedly, PennantPark Investment 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 PennantPark Investment will offset losses from the drop in PennantPark Investment's long position.| Hudson Technologies vs. Sensient Technologies | Hudson Technologies vs. Innospec | Hudson Technologies vs. H B Fuller | Hudson Technologies vs. Quaker Chemical |
| PennantPark Investment vs. Sixth Street Specialty | PennantPark Investment vs. New Mountain Finance | PennantPark Investment vs. Carlyle Secured Lending | PennantPark Investment vs. BlackRock TCP Capital |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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