Correlation Between HNI Corp and Hudson Technologies

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

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

Diversification Opportunities for HNI Corp and Hudson Technologies

0.23

Correlation Coefficient

HNI Corp  Hudson Technologies

Modest diversification

The 3 months correlation between HNI and Hudson is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding HNI Corp and Hudson Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudson Technologies and HNI Corp 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 HNI Corp are associated (or correlated) with Hudson Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hudson Technologies has no effect on the direction of HNI Corp i.e., HNI Corp and Hudson Technologies go up and down completely randomly.

Pair Corralation between HNI Corp and Hudson Technologies

Considering the 90-day investment horizon HNI Corp is expected to under-perform the Hudson Technologies. But the stock apears to be less risky and, when comparing its historical volatility, HNI Corp is 1.08 times less risky than Hudson Technologies. The stock trades about -0.16 of its potential returns per unit of risk. The Hudson Technologies is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  594.00  in Hudson Technologies on November 28, 2024 and sell it today you would lose (5.00) from holding Hudson Technologies or give up 0.84% of portfolio value over 90 days.

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

HNI Corp  vs.  Hudson Technologies

HNI Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days HNI Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in March 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Hudson Technologies

Risk-Adjusted Performance

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 very healthy basic indicators, Hudson Technologies is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with HNI Corp and Hudson Technologies

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

The idea behind HNI Corp and Hudson Technologies 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.