Correlation Between Hudson Technologies and Canopy Growth
Can any of the company-specific risk be diversified away by investing in both Hudson Technologies and Canopy Growth 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 Canopy Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hudson Technologies and Canopy Growth Corp, you can compare the effects of market volatilities on Hudson Technologies and Canopy Growth 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 Canopy Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hudson Technologies and Canopy Growth.
Diversification Opportunities for Hudson Technologies and Canopy Growth
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hudson and Canopy is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Technologies and Canopy Growth Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canopy Growth Corp 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 Canopy Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canopy Growth Corp has no effect on the direction of Hudson Technologies i.e., Hudson Technologies and Canopy Growth go up and down completely randomly.
Pair Corralation between Hudson Technologies and Canopy Growth
Given the investment horizon of 90 days Hudson Technologies is expected to generate 1.16 times less return on investment than Canopy Growth. But when comparing it to its historical volatility, Hudson Technologies is 2.23 times less risky than Canopy Growth. It trades about 0.12 of its potential returns per unit of risk. Canopy Growth Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 116.00 in Canopy Growth Corp on March 23, 2025 and sell it today you would earn a total of 13.00 from holding Canopy Growth Corp or generate 11.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hudson Technologies vs. Canopy Growth Corp
Performance |
| Timeline |
| Hudson Technologies |
| Canopy Growth Corp |
Hudson Technologies and Canopy Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hudson Technologies and Canopy Growth
The main advantage of trading using opposite Hudson Technologies and Canopy Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudson Technologies position performs unexpectedly, Canopy Growth 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 Canopy Growth will offset losses from the drop in Canopy Growth's long position.| Hudson Technologies vs. Sensient Technologies | Hudson Technologies vs. Innospec | Hudson Technologies vs. H B Fuller | Hudson Technologies vs. Quaker Chemical |
| Canopy Growth vs. AMCON Distributing | Canopy Growth vs. Mattel Inc | Canopy Growth vs. Canlan Ice Sports | Canopy Growth vs. Sysco |
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.
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