Correlation Between Hudson Technologies and Under Armour

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

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

Diversification Opportunities for Hudson Technologies and Under Armour

-0.6

Correlation Coefficient

Hudson Technologies  Under Armour

Excellent diversification

The 3 months correlation between Hudson and Under is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Technologies and Under Armour C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Under Armour C 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 Under Armour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Under Armour C has no effect on the direction of Hudson Technologies i.e., Hudson Technologies and Under Armour go up and down completely randomly.

Pair Corralation between Hudson Technologies and Under Armour

Given the investment horizon of 90 days Hudson Technologies is expected to under-perform the Under Armour. In addition to that, Hudson Technologies is 1.06 times more volatile than Under Armour C. It trades about -0.03 of its total potential returns per unit of risk. Under Armour C is currently generating about 0.01 per unit of volatility. If you would invest  881.00  in Under Armour C on September 19, 2024 and sell it today you would lose (98.00) from holding Under Armour C or give up 11.12% of portfolio value over 90 days.

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

Hudson Technologies  vs.  Under Armour C

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 January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Under Armour C

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Under Armour C are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Under Armour may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Hudson Technologies and Under Armour

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

The idea behind Hudson Technologies and Under Armour C 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.