Correlation Between Lion One and Hudson Technologies
Can any of the company-specific risk be diversified away by investing in both Lion One 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 Lion One and Hudson Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion One Metals and Hudson Technologies, you can compare the effects of market volatilities on Lion One 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 Lion One with a short position of Hudson Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Hudson Technologies.
Diversification Opportunities for Lion One and Hudson Technologies
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lion and Hudson is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Hudson Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudson Technologies and Lion One 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 Lion One Metals 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 Lion One i.e., Lion One and Hudson Technologies go up and down completely randomly.
Pair Corralation between Lion One and Hudson Technologies
Assuming the 90 days horizon Lion One Metals is expected to under-perform the Hudson Technologies. In addition to that, Lion One is 1.3 times more volatile than Hudson Technologies. It trades about -0.05 of its total potential returns per unit of risk. Hudson Technologies is currently generating about -0.02 per unit of volatility. If you would invest 1,000.00 in Hudson Technologies on September 13, 2024 and sell it today you would lose (410.00) from holding Hudson Technologies or give up 41.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. Hudson Technologies
Performance |
| Timeline |
| Lion One Metals |
| Hudson Technologies |
Lion One and Hudson Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Hudson Technologies
The main advantage of trading using opposite Lion One and Hudson Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One 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.| Lion One vs. Advantage Solutions | Lion One vs. Atlas Corp | Lion One vs. PureCycle Technologies | Lion One vs. WM Technology |
| 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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