Correlation Between EXPRESS and Hudson Technologies

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

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

Diversification Opportunities for EXPRESS and Hudson Technologies

0.27

Correlation Coefficient

EXPRESS  Hudson Technologies

Modest diversification

The 3 months correlation between EXPRESS and Hudson is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding EXPRESS SCRIPTS HLDG and Hudson Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudson Technologies and EXPRESS 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 EXPRESS SCRIPTS HLDG 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 EXPRESS i.e., EXPRESS and Hudson Technologies go up and down completely randomly.

Pair Corralation between EXPRESS and Hudson Technologies

Assuming the 90 days trading horizon EXPRESS SCRIPTS HLDG is expected to generate 0.31 times more return on investment than Hudson Technologies. However, EXPRESS SCRIPTS HLDG is 3.24 times less risky than Hudson Technologies. It trades about 0.0 of its potential returns per unit of risk. Hudson Technologies is currently generating about -0.02 per unit of risk. If you would invest  9,562  in EXPRESS SCRIPTS HLDG on October 12, 2024 and sell it today you would lose (90.00) from holding EXPRESS SCRIPTS HLDG or give up 0.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	92.73%
Values	Daily Returns

EXPRESS SCRIPTS HLDG  vs.  Hudson Technologies

EXPRESS SCRIPTS HLDG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EXPRESS SCRIPTS HLDG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, EXPRESS is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

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 weak 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 EXPRESS and Hudson Technologies

The main advantage of trading using opposite EXPRESS and Hudson Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EXPRESS 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 EXPRESS SCRIPTS HLDG 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..