Correlation Between Hudson Global and Manhattan Associates

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

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

Diversification Opportunities for Hudson Global and Manhattan Associates

-0.2

Correlation Coefficient

Hudson Global  Manhattan Associates

Good diversification

The 3 months correlation between Hudson and Manhattan is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Global and Manhattan Associates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manhattan Associates and Hudson Global 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 Global are associated (or correlated) with Manhattan Associates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manhattan Associates has no effect on the direction of Hudson Global i.e., Hudson Global and Manhattan Associates go up and down completely randomly.

Pair Corralation between Hudson Global and Manhattan Associates

Given the investment horizon of 90 days Hudson Global is expected to generate 41.54 times more return on investment than Manhattan Associates. However, Hudson Global is 41.54 times more volatile than Manhattan Associates. It trades about 0.07 of its potential returns per unit of risk. Manhattan Associates is currently generating about 0.12 per unit of risk. If you would invest  1,667  in Hudson Global on September 13, 2024 and sell it today you would lose (177.00) from holding Hudson Global or give up 10.62% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.32%
Values	Daily Returns

Hudson Global  vs.  Manhattan Associates

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 very healthy basic indicators, Hudson Global is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Manhattan Associates

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Manhattan Associates are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Manhattan Associates demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hudson Global and Manhattan Associates

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

The idea behind Hudson Global and Manhattan Associates 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.