Correlation Between Hudson Technologies and TruBridge

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

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

Diversification Opportunities for Hudson Technologies and TruBridge

-0.82

Correlation Coefficient

Hudson Technologies  TruBridge

Pay attention - limited upside

The 3 months correlation between Hudson and TruBridge is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Technologies and TruBridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TruBridge 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 TruBridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TruBridge has no effect on the direction of Hudson Technologies i.e., Hudson Technologies and TruBridge go up and down completely randomly.

Pair Corralation between Hudson Technologies and TruBridge

Given the investment horizon of 90 days Hudson Technologies is expected to under-perform the TruBridge. In addition to that, Hudson Technologies is 1.17 times more volatile than TruBridge. It trades about 0.0 of its total potential returns per unit of risk. TruBridge is currently generating about 0.52 per unit of volatility. If you would invest  1,809  in TruBridge on October 11, 2024 and sell it today you would earn a total of  341.00  from holding TruBridge or generate 18.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Hudson Technologies  vs.  TruBridge

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.

TruBridge

Risk-Adjusted Performance

29 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in TruBridge are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, TruBridge reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hudson Technologies and TruBridge

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

The idea behind Hudson Technologies and TruBridge 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.