Correlation Between EPR Properties and Hudson Technologies

Can any of the company-specific risk be diversified away by investing in both EPR Properties 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 EPR Properties and Hudson Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between EPR Properties 5750 and Hudson Technologies, you can compare the effects of market volatilities on EPR Properties 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 EPR Properties with a short position of Hudson Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPR Properties and Hudson Technologies.

Diversification Opportunities for EPR Properties and Hudson Technologies

0.39

Correlation Coefficient

EPR Properties  Hudson Technologies

Weak diversification

The 3 months correlation between EPR and Hudson is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding EPR Properties 5750 and Hudson Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudson Technologies and EPR Properties 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 EPR Properties 5750 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 EPR Properties i.e., EPR Properties and Hudson Technologies go up and down completely randomly.

Pair Corralation between EPR Properties and Hudson Technologies

Assuming the 90 days trading horizon EPR Properties 5750 is expected to generate 0.4 times more return on investment than Hudson Technologies. However, EPR Properties 5750 is 2.51 times less risky than Hudson Technologies. It trades about 0.01 of its potential returns per unit of risk. Hudson Technologies is currently generating about -0.03 per unit of risk. If you would invest  1,876  in EPR Properties 5750 on October 4, 2024 and sell it today you would earn a total of  99.00  from holding EPR Properties 5750 or generate 5.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

EPR Properties 5750  vs.  Hudson Technologies

EPR Properties 5750

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EPR Properties 5750 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Preferred Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Hudson Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hudson Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with EPR Properties and Hudson Technologies

The main advantage of trading using opposite EPR Properties and Hudson Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPR Properties 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.

The idea behind EPR Properties 5750 and Hudson Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.