Correlation Between Hudson Technologies and SunOpta
Can any of the company-specific risk be diversified away by investing in both Hudson Technologies and SunOpta 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 SunOpta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hudson Technologies and SunOpta, you can compare the effects of market volatilities on Hudson Technologies and SunOpta 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 SunOpta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hudson Technologies and SunOpta.
Diversification Opportunities for Hudson Technologies and SunOpta
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hudson and SunOpta is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Technologies and SunOpta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunOpta 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 SunOpta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunOpta has no effect on the direction of Hudson Technologies i.e., Hudson Technologies and SunOpta go up and down completely randomly.
Pair Corralation between Hudson Technologies and SunOpta
Given the investment horizon of 90 days Hudson Technologies is expected to under-perform the SunOpta. But the stock apears to be less risky and, when comparing its historical volatility, Hudson Technologies is 1.08 times less risky than SunOpta. The stock trades about -0.09 of its potential returns per unit of risk. The SunOpta is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 475.00 in SunOpta on September 4, 2024 and sell it today you would earn a total of 297.00 from holding SunOpta or generate 62.53% 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. SunOpta
Performance |
| Timeline |
| Hudson Technologies |
| SunOpta |
Hudson Technologies and SunOpta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hudson Technologies and SunOpta
The main advantage of trading using opposite Hudson Technologies and SunOpta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudson Technologies position performs unexpectedly, SunOpta 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 SunOpta will offset losses from the drop in SunOpta's long position.| Hudson Technologies vs. Sensient Technologies | Hudson Technologies vs. Innospec | Hudson Technologies vs. H B Fuller | Hudson Technologies vs. Quaker Chemical |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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