Correlation Between Highlight Communications and HUDSON TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both Highlight Communications and HUDSON TECHNOLOGY 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 Highlight Communications and HUDSON TECHNOLOGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highlight Communications AG and HUDSON TECHNOLOGY, you can compare the effects of market volatilities on Highlight Communications and HUDSON TECHNOLOGY 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 Highlight Communications with a short position of HUDSON TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highlight Communications and HUDSON TECHNOLOGY.
Diversification Opportunities for Highlight Communications and HUDSON TECHNOLOGY
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Highlight and HUDSON is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Highlight Communications AG and HUDSON TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUDSON TECHNOLOGY and Highlight Communications 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 Highlight Communications AG are associated (or correlated) with HUDSON TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUDSON TECHNOLOGY has no effect on the direction of Highlight Communications i.e., Highlight Communications and HUDSON TECHNOLOGY go up and down completely randomly.
Pair Corralation between Highlight Communications and HUDSON TECHNOLOGY
Assuming the 90 days trading horizon Highlight Communications AG is expected to under-perform the HUDSON TECHNOLOGY. But the stock apears to be less risky and, when comparing its historical volatility, Highlight Communications AG is 1.11 times less risky than HUDSON TECHNOLOGY. The stock trades about -0.08 of its potential returns per unit of risk. The HUDSON TECHNOLOGY is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 1,155 in HUDSON TECHNOLOGY on September 14, 2024 and sell it today you would lose (625.00) from holding HUDSON TECHNOLOGY or give up 54.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.64% |
| Values | Daily Returns |
Highlight Communications AG vs. HUDSON TECHNOLOGY
Performance |
| Timeline |
| Highlight Communications |
| HUDSON TECHNOLOGY |
Highlight Communications and HUDSON TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highlight Communications and HUDSON TECHNOLOGY
The main advantage of trading using opposite Highlight Communications and HUDSON TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highlight Communications position performs unexpectedly, HUDSON TECHNOLOGY 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 HUDSON TECHNOLOGY will offset losses from the drop in HUDSON TECHNOLOGY's long position.| Highlight Communications vs. The Walt Disney | Highlight Communications vs. Charter Communications | Highlight Communications vs. Warner Music Group | Highlight Communications vs. Superior Plus Corp |
| HUDSON TECHNOLOGY vs. Hyster Yale Materials Handling | HUDSON TECHNOLOGY vs. Plastic Omnium | HUDSON TECHNOLOGY vs. Highlight Communications AG | HUDSON TECHNOLOGY vs. Ribbon Communications |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |