Correlation Between Integral and Hudson Pacific

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

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

Diversification Opportunities for Integral and Hudson Pacific

0.28

Correlation Coefficient

Integral  Hudson Pacific

Modest diversification

The 3 months correlation between Integral and Hudson is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Integral Ad Science and Hudson Pacific Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudson Pacific Properties and Integral 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 Integral Ad Science are associated (or correlated) with Hudson Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hudson Pacific Properties has no effect on the direction of Integral i.e., Integral and Hudson Pacific go up and down completely randomly.

Pair Corralation between Integral and Hudson Pacific

Considering the 90-day investment horizon Integral Ad Science is expected to generate 0.2 times more return on investment than Hudson Pacific. However, Integral Ad Science is 5.09 times less risky than Hudson Pacific. It trades about -0.43 of its potential returns per unit of risk. Hudson Pacific Properties is currently generating about -0.2 per unit of risk. If you would invest  1,154  in Integral Ad Science on October 3, 2024 and sell it today you would lose (110.00) from holding Integral Ad Science or give up 9.53% of portfolio value over 90 days.

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

Integral Ad Science  vs.  Hudson Pacific Properties

Integral Ad Science

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Integral Ad Science are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Integral is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Hudson Pacific Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hudson Pacific Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Integral and Hudson Pacific

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

The idea behind Integral Ad Science and Hudson Pacific Properties 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.