Correlation Between Hudson Technologies and FEDEX

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

By analyzing existing cross correlation between Hudson Technologies and FEDEX P 51, you can compare the effects of market volatilities on Hudson Technologies and FEDEX 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 Hudson Technologies with a short position of FEDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hudson Technologies and FEDEX.

Diversification Opportunities for Hudson Technologies and FEDEX

0.26

Correlation Coefficient

Hudson Technologies  FEDEX

Modest diversification

The 3 months correlation between Hudson and FEDEX is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Technologies and FEDEX P 51 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEDEX P 51 and Hudson Technologies 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 Hudson Technologies are associated (or correlated) with FEDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEDEX P 51 has no effect on the direction of Hudson Technologies i.e., Hudson Technologies and FEDEX go up and down completely randomly.

Pair Corralation between Hudson Technologies and FEDEX

Given the investment horizon of 90 days Hudson Technologies is expected to under-perform the FEDEX. In addition to that, Hudson Technologies is 2.72 times more volatile than FEDEX P 51. It trades about -0.11 of its total potential returns per unit of risk. FEDEX P 51 is currently generating about -0.05 per unit of volatility. If you would invest  9,778  in FEDEX P 51 on September 5, 2024 and sell it today you would lose (464.00) from holding FEDEX P 51 or give up 4.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.31%
Values	Daily Returns

Hudson Technologies  vs.  FEDEX P 51

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 January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

FEDEX P 51

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FEDEX P 51 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, FEDEX is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hudson Technologies and FEDEX

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

The idea behind Hudson Technologies and FEDEX P 51 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.