Correlation Between Hudson Technologies and Inhibrx

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

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

Diversification Opportunities for Hudson Technologies and Inhibrx

0.51

Correlation Coefficient

Hudson Technologies  Inhibrx

Very weak diversification

The 3 months correlation between Hudson and Inhibrx is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Technologies and Inhibrx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inhibrx 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 Inhibrx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inhibrx has no effect on the direction of Hudson Technologies i.e., Hudson Technologies and Inhibrx go up and down completely randomly.

Pair Corralation between Hudson Technologies and Inhibrx

Given the investment horizon of 90 days Hudson Technologies is expected to generate 13.81 times less return on investment than Inhibrx. But when comparing it to its historical volatility, Hudson Technologies is 1.56 times less risky than Inhibrx. It trades about 0.01 of its potential returns per unit of risk. Inhibrx is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,570  in Inhibrx on October 7, 2024 and sell it today you would earn a total of  45.00  from holding Inhibrx or generate 2.87% return on investment over 90 days.

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

Hudson Technologies  vs.  Inhibrx

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.

Inhibrx

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Inhibrx are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, Inhibrx may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Hudson Technologies and Inhibrx

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

The idea behind Hudson Technologies and Inhibrx 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.