Correlation Between Hudson Technologies and LEVEL

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

By analyzing existing cross correlation between Hudson Technologies and LEVEL 3 FING, you can compare the effects of market volatilities on Hudson Technologies and LEVEL 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 LEVEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hudson Technologies and LEVEL.

Diversification Opportunities for Hudson Technologies and LEVEL

0.22

Correlation Coefficient

Hudson Technologies  LEVEL

Modest diversification

The 3 months correlation between Hudson and LEVEL is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Technologies and LEVEL 3 FING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LEVEL 3 FING 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 LEVEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LEVEL 3 FING has no effect on the direction of Hudson Technologies i.e., Hudson Technologies and LEVEL go up and down completely randomly.

Pair Corralation between Hudson Technologies and LEVEL

Given the investment horizon of 90 days Hudson Technologies is expected to generate 0.26 times more return on investment than LEVEL. However, Hudson Technologies is 3.86 times less risky than LEVEL. It trades about 0.14 of its potential returns per unit of risk. LEVEL 3 FING is currently generating about -0.17 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	Very Weak
Accuracy	68.85%
Values	Daily Returns

Hudson Technologies  vs.  LEVEL 3 FING

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.

LEVEL 3 FING

Risk-Adjusted Performance

Very Weak

Over the last 90 days LEVEL 3 FING has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for LEVEL 3 FING investors.

Pair Trading with Hudson Technologies and LEVEL

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

The idea behind Hudson Technologies and LEVEL 3 FING 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.