Correlation Between Hudson Technologies and AMREP

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

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

Diversification Opportunities for Hudson Technologies and AMREP

0.35

Correlation Coefficient

Hudson Technologies  AMREP

Weak diversification

The 3 months correlation between Hudson and AMREP is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Technologies and AMREP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMREP and Hudson Technologies 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 Hudson Technologies are associated (or correlated) with AMREP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMREP has no effect on the direction of Hudson Technologies i.e., Hudson Technologies and AMREP go up and down completely randomly.

Pair Corralation between Hudson Technologies and AMREP

Given the investment horizon of 90 days Hudson Technologies is expected to generate 0.58 times more return on investment than AMREP. However, Hudson Technologies is 1.74 times less risky than AMREP. It trades about 0.02 of its potential returns per unit of risk. AMREP is currently generating about -0.09 per unit of risk. If you would invest  576.00  in Hudson Technologies on November 19, 2024 and sell it today you would earn a total of  8.00  from holding Hudson Technologies or generate 1.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Hudson Technologies  vs.  AMREP

Hudson Technologies

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hudson Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Hudson Technologies is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

AMREP

Risk-Adjusted Performance

Very Weak

Over the last 90 days AMREP has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in March 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Hudson Technologies and AMREP

The main advantage of trading using opposite Hudson Technologies and AMREP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudson Technologies position performs unexpectedly, AMREP 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 AMREP will offset losses from the drop in AMREP's long position.

The idea behind Hudson Technologies and AMREP 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 CEOs Directory module to screen CEOs from public companies around the world.