Correlation Between Mayfair Gold and Hudson Technologies

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

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

Diversification Opportunities for Mayfair Gold and Hudson Technologies

0.67

Correlation Coefficient

Mayfair Gold  Hudson Technologies

Poor diversification

The 3 months correlation between Mayfair and Hudson is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Mayfair Gold Corp and Hudson Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudson Technologies and Mayfair Gold 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 Mayfair Gold 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 Mayfair Gold i.e., Mayfair Gold and Hudson Technologies go up and down completely randomly.

Pair Corralation between Mayfair Gold and Hudson Technologies

Assuming the 90 days horizon Mayfair Gold Corp is expected to under-perform the Hudson Technologies. In addition to that, Mayfair Gold is 1.56 times more volatile than Hudson Technologies. It trades about -0.15 of its total potential returns per unit of risk. Hudson Technologies is currently generating about 0.11 per unit of volatility. If you would invest  584.00  in Hudson Technologies on October 9, 2024 and sell it today you would earn a total of  22.00  from holding Hudson Technologies or generate 3.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.0%
Values	Daily Returns

Mayfair Gold Corp  vs.  Hudson Technologies

Mayfair Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mayfair Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's fundamental indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Hudson Technologies

Risk-Adjusted Performance

0 of 100

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 uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Mayfair Gold and Hudson Technologies

The main advantage of trading using opposite Mayfair Gold and Hudson Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mayfair Gold 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 Mayfair Gold 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.