Correlation Between Hudson Technologies and CITIGROUP

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Can any of the company-specific risk be diversified away by investing in both Hudson Technologies and CITIGROUP 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 CITIGROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hudson Technologies and CITIGROUP INC 6675, you can compare the effects of market volatilities on Hudson Technologies and CITIGROUP 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 CITIGROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hudson Technologies and CITIGROUP.

Diversification Opportunities for Hudson Technologies and CITIGROUP

0.51
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Hudson and CITIGROUP is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Technologies and CITIGROUP INC 6675 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CITIGROUP INC 6675 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 CITIGROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CITIGROUP INC 6675 has no effect on the direction of Hudson Technologies i.e., Hudson Technologies and CITIGROUP go up and down completely randomly.

Pair Corralation between Hudson Technologies and CITIGROUP

Given the investment horizon of 90 days Hudson Technologies is expected to generate 1.75 times more return on investment than CITIGROUP. However, Hudson Technologies is 1.75 times more volatile than CITIGROUP INC 6675. It trades about 0.07 of its potential returns per unit of risk. CITIGROUP INC 6675 is currently generating about -0.12 per unit of risk. If you would invest  573.00  in Hudson Technologies on September 12, 2024 and sell it today you would earn a total of  17.00  from holding Hudson Technologies or generate 2.97% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy81.82%
ValuesDaily Returns

Hudson Technologies  vs.  CITIGROUP INC 6675

 Performance 
       Timeline  
Hudson Technologies 

Risk-Adjusted Performance

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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.
CITIGROUP INC 6675 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days CITIGROUP INC 6675 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for CITIGROUP INC 6675 investors.

Hudson Technologies and CITIGROUP Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Hudson Technologies and CITIGROUP

The main advantage of trading using opposite Hudson Technologies and CITIGROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudson Technologies position performs unexpectedly, CITIGROUP 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 CITIGROUP will offset losses from the drop in CITIGROUP's long position.
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The idea behind Hudson Technologies and CITIGROUP INC 6675 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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