Correlation Between Hudson Technologies and JPMORGAN

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

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

Diversification Opportunities for Hudson Technologies and JPMORGAN

0.08

Correlation Coefficient

Hudson Technologies  JPMORGAN

Significant diversification

The 3 months correlation between Hudson and JPMORGAN is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Technologies and JPMORGAN CHASE CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMORGAN CHASE CO 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 JPMORGAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMORGAN CHASE CO has no effect on the direction of Hudson Technologies i.e., Hudson Technologies and JPMORGAN go up and down completely randomly.

Pair Corralation between Hudson Technologies and JPMORGAN

Given the investment horizon of 90 days Hudson Technologies is expected to generate 6.35 times more return on investment than JPMORGAN. However, Hudson Technologies is 6.35 times more volatile than JPMORGAN CHASE CO. It trades about 0.14 of its potential returns per unit of risk. JPMORGAN CHASE CO is currently generating about 0.13 per unit of risk. If you would invest  529.00  in Hudson Technologies on December 23, 2024 and sell it today you would earn a total of  86.00  from holding Hudson Technologies or generate 16.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Hudson Technologies  vs.  JPMORGAN CHASE CO

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.

JPMORGAN CHASE CO

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JPMORGAN CHASE CO are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, JPMORGAN 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 JPMORGAN

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

The idea behind Hudson Technologies and JPMORGAN CHASE CO 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.