Correlation Between LION ONE and HUDSON TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both LION ONE 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 LION ONE and HUDSON TECHNOLOGY 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 TECHNOLOGY, you can compare the effects of market volatilities on LION ONE 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 LION ONE with a short position of HUDSON TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of LION ONE and HUDSON TECHNOLOGY.
Diversification Opportunities for LION ONE and HUDSON TECHNOLOGY
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LION and HUDSON is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding LION ONE METALS and HUDSON TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUDSON TECHNOLOGY 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 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 LION ONE i.e., LION ONE and HUDSON TECHNOLOGY go up and down completely randomly.
Pair Corralation between LION ONE and HUDSON TECHNOLOGY
Assuming the 90 days trading horizon LION ONE METALS is expected to under-perform the HUDSON TECHNOLOGY. In addition to that, LION ONE is 1.03 times more volatile than HUDSON TECHNOLOGY. It trades about -0.04 of its total potential returns per unit of risk. HUDSON TECHNOLOGY is currently generating about -0.01 per unit of volatility. If you would invest 970.00 in HUDSON TECHNOLOGY on September 5, 2024 and sell it today you would lose (420.00) from holding HUDSON TECHNOLOGY or give up 43.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LION ONE METALS vs. HUDSON TECHNOLOGY
Performance |
| Timeline |
| LION ONE METALS |
| HUDSON TECHNOLOGY |
LION ONE and HUDSON TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LION ONE and HUDSON TECHNOLOGY
The main advantage of trading using opposite LION ONE and HUDSON TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LION ONE 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.| LION ONE vs. Jacquet Metal Service | LION ONE vs. Corsair Gaming | LION ONE vs. Pembina Pipeline Corp | LION ONE vs. DELTA AIR LINES |
| HUDSON TECHNOLOGY vs. Perseus Mining Limited | HUDSON TECHNOLOGY vs. Sims Metal Management | HUDSON TECHNOLOGY vs. Major Drilling Group | HUDSON TECHNOLOGY vs. Lion One Metals |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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