Correlation Between Verisk Analytics and Hudson Global

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

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

Diversification Opportunities for Verisk Analytics and Hudson Global

-0.7

Correlation Coefficient

Verisk Analytics  Hudson Global

Excellent diversification

The 3 months correlation between Verisk and Hudson is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Verisk Analytics and Hudson Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudson Global and Verisk Analytics 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 Verisk Analytics are associated (or correlated) with Hudson Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hudson Global has no effect on the direction of Verisk Analytics i.e., Verisk Analytics and Hudson Global go up and down completely randomly.

Pair Corralation between Verisk Analytics and Hudson Global

Given the investment horizon of 90 days Verisk Analytics is expected to under-perform the Hudson Global. But the stock apears to be less risky and, when comparing its historical volatility, Verisk Analytics is 3.45 times less risky than Hudson Global. The stock trades about -0.04 of its potential returns per unit of risk. The Hudson Global is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,435  in Hudson Global on September 15, 2024 and sell it today you would earn a total of  55.00  from holding Hudson Global or generate 3.83% return on investment over 90 days.

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

Verisk Analytics  vs.  Hudson Global

Verisk Analytics

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Verisk Analytics are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Verisk Analytics is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Hudson Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hudson Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Verisk Analytics and Hudson Global

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

The idea behind Verisk Analytics and Hudson Global 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.

Check out your portfolio center.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.