Correlation Between Hudson Technologies and ALTRIA

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

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

Diversification Opportunities for Hudson Technologies and ALTRIA

-0.31

Correlation Coefficient

Hudson Technologies  ALTRIA

Very good diversification

The 3 months correlation between Hudson and ALTRIA is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Technologies and ALTRIA GROUP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALTRIA GROUP INC 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 ALTRIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALTRIA GROUP INC has no effect on the direction of Hudson Technologies i.e., Hudson Technologies and ALTRIA go up and down completely randomly.

Pair Corralation between Hudson Technologies and ALTRIA

Given the investment horizon of 90 days Hudson Technologies is expected to generate 13.53 times more return on investment than ALTRIA. However, Hudson Technologies is 13.53 times more volatile than ALTRIA GROUP INC. It trades about 0.13 of its potential returns per unit of risk. ALTRIA GROUP INC is currently generating about 0.02 per unit of risk. If you would invest  541.00  in Hudson Technologies on December 25, 2024 and sell it today you would earn a total of  85.00  from holding Hudson Technologies or generate 15.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Hudson Technologies  vs.  ALTRIA GROUP INC

Hudson Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hudson Technologies are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Hudson Technologies displayed solid returns over the last few months and may actually be approaching a breakup point.

ALTRIA GROUP INC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ALTRIA GROUP INC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, ALTRIA is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hudson Technologies and ALTRIA

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

The idea behind Hudson Technologies and ALTRIA GROUP INC 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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.