Correlation Between Hudson Technologies and SNDL
Can any of the company-specific risk be diversified away by investing in both Hudson Technologies and SNDL 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 SNDL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hudson Technologies and SNDL Inc, you can compare the effects of market volatilities on Hudson Technologies and SNDL 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 SNDL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hudson Technologies and SNDL.
Diversification Opportunities for Hudson Technologies and SNDL
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hudson and SNDL is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Technologies and SNDL Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SNDL Inc 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 SNDL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SNDL Inc has no effect on the direction of Hudson Technologies i.e., Hudson Technologies and SNDL go up and down completely randomly.
Pair Corralation between Hudson Technologies and SNDL
Given the investment horizon of 90 days Hudson Technologies is expected to under-perform the SNDL. But the stock apears to be less risky and, when comparing its historical volatility, Hudson Technologies is 1.37 times less risky than SNDL. The stock trades about -0.02 of its potential returns per unit of risk. The SNDL Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 202.00 in SNDL Inc on September 14, 2024 and sell it today you would lose (20.00) from holding SNDL Inc or give up 9.9% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hudson Technologies vs. SNDL Inc
Performance |
Timeline |
Hudson Technologies |
SNDL Inc |
Hudson Technologies and SNDL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hudson Technologies and SNDL
The main advantage of trading using opposite Hudson Technologies and SNDL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudson Technologies position performs unexpectedly, SNDL 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 SNDL will offset losses from the drop in SNDL's long position.Hudson Technologies vs. Sensient Technologies | Hudson Technologies vs. Innospec | Hudson Technologies vs. H B Fuller | Hudson Technologies vs. Quaker Chemical |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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