Correlation Between Link Real and Hudson Technologies
Can any of the company-specific risk be diversified away by investing in both Link Real 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 Link Real and Hudson Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Link Real Estate and Hudson Technologies, you can compare the effects of market volatilities on Link Real 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 Link Real with a short position of Hudson Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Link Real and Hudson Technologies.
Diversification Opportunities for Link Real and Hudson Technologies
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Link and Hudson is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Link Real Estate and Hudson Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudson Technologies and Link Real 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 Link Real Estate 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 Link Real i.e., Link Real and Hudson Technologies go up and down completely randomly.
Pair Corralation between Link Real and Hudson Technologies
Assuming the 90 days horizon Link Real Estate is expected to generate 0.55 times more return on investment than Hudson Technologies. However, Link Real Estate is 1.82 times less risky than Hudson Technologies. It trades about -0.11 of its potential returns per unit of risk. Hudson Technologies is currently generating about -0.2 per unit of risk. If you would invest 475.00 in Link Real Estate on September 1, 2024 and sell it today you would lose (35.00) from holding Link Real Estate or give up 7.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Link Real Estate vs. Hudson Technologies
Performance |
| Timeline |
| Link Real Estate |
| Hudson Technologies |
Link Real and Hudson Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Link Real and Hudson Technologies
The main advantage of trading using opposite Link Real and Hudson Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Link Real 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.| Link Real vs. Kimco Realty | Link Real vs. Simon Property Group | Link Real vs. Saul Centers | Link Real vs. Kimco Realty |
| 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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