Correlation Between Linde Plc and Hudson Technologies
Can any of the company-specific risk be diversified away by investing in both Linde Plc and Hudson Technologies 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 Linde Plc and Hudson Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Linde plc Ordinary and Hudson Technologies, you can compare the effects of market volatilities on Linde Plc and Hudson Technologies 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 Linde Plc with a short position of Hudson Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Linde Plc and Hudson Technologies.
Diversification Opportunities for Linde Plc and Hudson Technologies
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Linde and Hudson is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Linde plc Ordinary and Hudson Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudson Technologies and Linde Plc 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 Linde plc Ordinary are associated (or correlated) with Hudson Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hudson Technologies has no effect on the direction of Linde Plc i.e., Linde Plc and Hudson Technologies go up and down completely randomly.
Pair Corralation between Linde Plc and Hudson Technologies
Considering the 90-day investment horizon Linde plc Ordinary is expected to under-perform the Hudson Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Linde plc Ordinary is 2.17 times less risky than Hudson Technologies. The stock trades about -0.29 of its potential returns per unit of risk. The Hudson Technologies is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 584.00 in Hudson Technologies on October 10, 2024 and sell it today you would earn a total of 4.00 from holding Hudson Technologies or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Linde plc Ordinary vs. Hudson Technologies
Performance |
| Timeline |
| Linde plc Ordinary |
| Hudson Technologies |
Linde Plc and Hudson Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Linde Plc and Hudson Technologies
The main advantage of trading using opposite Linde Plc and Hudson Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Linde Plc position performs unexpectedly, Hudson Technologies 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 Technologies will offset losses from the drop in Hudson Technologies' long position.| Linde Plc vs. PPG Industries | Linde Plc vs. Ecolab Inc | Linde Plc vs. Sherwin Williams Co | Linde Plc vs. LyondellBasell Industries NV |
| 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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