Correlation Between Kubota Corp and Hydrofarm Holdings

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

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

Diversification Opportunities for Kubota Corp and Hydrofarm Holdings

0.0

Correlation Coefficient

Kubota Corp  Hydrofarm Holdings

Pay attention - limited upside

The 3 months correlation between Kubota and Hydrofarm is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kubota Corp ADR and Hydrofarm Holdings Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hydrofarm Holdings and Kubota 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 Kubota Corp ADR are associated (or correlated) with Hydrofarm Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hydrofarm Holdings has no effect on the direction of Kubota Corp i.e., Kubota Corp and Hydrofarm Holdings go up and down completely randomly.

Pair Corralation between Kubota Corp and Hydrofarm Holdings

If you would invest (100.00) in Kubota Corp ADR on December 30, 2024 and sell it today you would earn a total of  100.00  from holding Kubota Corp ADR or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Kubota Corp ADR  vs.  Hydrofarm Holdings Group

Kubota Corp ADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kubota Corp ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Kubota Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Hydrofarm Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hydrofarm Holdings Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Kubota Corp and Hydrofarm Holdings

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

The idea behind Kubota Corp ADR and Hydrofarm Holdings Group 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.