Correlation Between Kentucky First and Hudson Global

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

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

Diversification Opportunities for Kentucky First and Hudson Global

-0.3

Correlation Coefficient

Kentucky First  Hudson Global

Very good diversification

The 3 months correlation between Kentucky and Hudson is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Kentucky First Federal and Hudson Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudson Global and Kentucky First 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 Kentucky First Federal 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 Kentucky First i.e., Kentucky First and Hudson Global go up and down completely randomly.

Pair Corralation between Kentucky First and Hudson Global

Given the investment horizon of 90 days Kentucky First Federal is expected to generate 1.29 times more return on investment than Hudson Global. However, Kentucky First is 1.29 times more volatile than Hudson Global. It trades about 0.24 of its potential returns per unit of risk. Hudson Global is currently generating about -0.1 per unit of risk. If you would invest  216.00  in Kentucky First Federal on May 7, 2025 and sell it today you would earn a total of  90.00  from holding Kentucky First Federal or generate 41.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.08%
Values	Daily Returns

Kentucky First Federal  vs.  Hudson Global

Kentucky First Federal

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kentucky First Federal are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady technical and fundamental indicators, Kentucky First sustained solid returns over the last few months and may actually be approaching a breakup point.

Hudson Global

Risk-Adjusted Performance

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 weak 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 Kentucky First and Hudson Global

The main advantage of trading using opposite Kentucky First and Hudson Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kentucky First 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 Kentucky First Federal 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.

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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.