Correlation Between Hudson Technologies and SNDL

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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 Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Hudson Technologies  vs.  SNDL Inc

 Performance 
       Timeline  
Hudson Technologies 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Hudson Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
SNDL Inc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days SNDL Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

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.
The idea behind Hudson Technologies and SNDL Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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