Correlation Between Major Drilling and HUDSON TECHNOLOGY

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

By analyzing existing cross correlation between Major Drilling Group and HUDSON TECHNOLOGY, you can compare the effects of market volatilities on Major Drilling and HUDSON TECHNOLOGY 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 Major Drilling with a short position of HUDSON TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Major Drilling and HUDSON TECHNOLOGY.

Diversification Opportunities for Major Drilling and HUDSON TECHNOLOGY

0.0

Correlation Coefficient

Major Drilling  HUDSON TECHNOLOGY

Pay attention - limited upside

The 3 months correlation between Major and HUDSON is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Major Drilling Group and HUDSON TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUDSON TECHNOLOGY and Major Drilling 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 Major Drilling Group are associated (or correlated) with HUDSON TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUDSON TECHNOLOGY has no effect on the direction of Major Drilling i.e., Major Drilling and HUDSON TECHNOLOGY go up and down completely randomly.

Pair Corralation between Major Drilling and HUDSON TECHNOLOGY

If you would invest  525.00  in Major Drilling Group on September 6, 2024 and sell it today you would earn a total of  40.00  from holding Major Drilling Group or generate 7.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Major Drilling Group  vs.  HUDSON TECHNOLOGY

Major Drilling Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Major Drilling Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Major Drilling may actually be approaching a critical reversion point that can send shares even higher in January 2025.

HUDSON TECHNOLOGY

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HUDSON TECHNOLOGY has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, HUDSON TECHNOLOGY is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Major Drilling and HUDSON TECHNOLOGY

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

The idea behind Major Drilling Group and HUDSON TECHNOLOGY 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.