Correlation Between BG Staffing and Hudson Global
Can any of the company-specific risk be diversified away by investing in both BG Staffing 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 BG Staffing and Hudson Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BG Staffing and Hudson Global, you can compare the effects of market volatilities on BG Staffing 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 BG Staffing with a short position of Hudson Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of BG Staffing and Hudson Global.
Diversification Opportunities for BG Staffing and Hudson Global
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BGSF and Hudson is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding BG Staffing and Hudson Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudson Global and BG Staffing 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 BG Staffing 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 BG Staffing i.e., BG Staffing and Hudson Global go up and down completely randomly.
Pair Corralation between BG Staffing and Hudson Global
Given the investment horizon of 90 days BG Staffing is expected to under-perform the Hudson Global. But the stock apears to be less risky and, when comparing its historical volatility, BG Staffing is 17.36 times less risky than Hudson Global. The stock trades about -0.07 of its potential returns per unit of risk. The Hudson Global is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,559 in Hudson Global on November 2, 2024 and sell it today you would lose (1,270) from holding Hudson Global or give up 49.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.38% |
| Values | Daily Returns |
BG Staffing vs. Hudson Global
Performance |
| Timeline |
| BG Staffing |
| Hudson Global |
BG Staffing and Hudson Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BG Staffing and Hudson Global
The main advantage of trading using opposite BG Staffing and Hudson Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BG Staffing 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.| BG Staffing vs. Kelly Services A | BG Staffing vs. Korn Ferry | BG Staffing vs. Heidrick Struggles International | BG Staffing vs. Hudson Global |
| Hudson Global vs. Mastech Holdings | Hudson Global vs. Kforce Inc | Hudson Global vs. Kelly Services A | Hudson Global vs. Korn Ferry |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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