Correlation Between Hudson Technologies and Sun Life
Can any of the company-specific risk be diversified away by investing in both Hudson Technologies and Sun Life 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 Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hudson Technologies and Sun Life Financial, you can compare the effects of market volatilities on Hudson Technologies and Sun Life 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 Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hudson Technologies and Sun Life.
Diversification Opportunities for Hudson Technologies and Sun Life
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hudson and Sun is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Technologies and Sun Life Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Life Financial 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 Sun Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Life Financial has no effect on the direction of Hudson Technologies i.e., Hudson Technologies and Sun Life go up and down completely randomly.
Pair Corralation between Hudson Technologies and Sun Life
Given the investment horizon of 90 days Hudson Technologies is expected to under-perform the Sun Life. In addition to that, Hudson Technologies is 2.88 times more volatile than Sun Life Financial. It trades about -0.03 of its total potential returns per unit of risk. Sun Life Financial is currently generating about 0.07 per unit of volatility. If you would invest 4,301 in Sun Life Financial on September 3, 2024 and sell it today you would earn a total of 1,838 from holding Sun Life Financial or generate 42.73% 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. Sun Life Financial
Performance |
| Timeline |
| Hudson Technologies |
| Sun Life Financial |
Hudson Technologies and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hudson Technologies and Sun Life
The main advantage of trading using opposite Hudson Technologies and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudson Technologies position performs unexpectedly, Sun Life 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 Sun Life will offset losses from the drop in Sun Life's long position.| Hudson Technologies vs. Sensient Technologies | Hudson Technologies vs. Innospec | Hudson Technologies vs. H B Fuller | Hudson Technologies vs. Quaker Chemical |
| Sun Life vs. Axa Equitable Holdings | Sun Life vs. American International Group | Sun Life vs. Arch Capital Group | Sun Life vs. Old Republic International |
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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