Correlation Between Hudson Resources and Greystone Logistics

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

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

Diversification Opportunities for Hudson Resources and Greystone Logistics

-0.12

Correlation Coefficient

Hudson Resources  Greystone Logistics

Good diversification

The 3 months correlation between Hudson and Greystone is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Resources and Greystone Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greystone Logistics and Hudson Resources 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 Resources are associated (or correlated) with Greystone Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greystone Logistics has no effect on the direction of Hudson Resources i.e., Hudson Resources and Greystone Logistics go up and down completely randomly.

Pair Corralation between Hudson Resources and Greystone Logistics

Assuming the 90 days horizon Hudson Resources is expected to under-perform the Greystone Logistics. In addition to that, Hudson Resources is 2.4 times more volatile than Greystone Logistics. It trades about -0.31 of its total potential returns per unit of risk. Greystone Logistics is currently generating about 0.19 per unit of volatility. If you would invest  98.00  in Greystone Logistics on October 7, 2024 and sell it today you would earn a total of  10.00  from holding Greystone Logistics or generate 10.2% return on investment over 90 days.

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

Hudson Resources  vs.  Greystone Logistics

Hudson Resources

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hudson Resources are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Hudson Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Greystone Logistics

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Hudson Resources and Greystone Logistics

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

The idea behind Hudson Resources and Greystone Logistics 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.