Correlation Between Hudson Technologies and BG Staffing
Can any of the company-specific risk be diversified away by investing in both Hudson Technologies and BG Staffing 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 BG Staffing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hudson Technologies and BG Staffing, you can compare the effects of market volatilities on Hudson Technologies and BG Staffing 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 BG Staffing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hudson Technologies and BG Staffing.
Diversification Opportunities for Hudson Technologies and BG Staffing
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hudson and BGSF is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Technologies and BG Staffing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BG Staffing 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 BG Staffing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BG Staffing has no effect on the direction of Hudson Technologies i.e., Hudson Technologies and BG Staffing go up and down completely randomly.
Pair Corralation between Hudson Technologies and BG Staffing
Given the investment horizon of 90 days Hudson Technologies is expected to generate 1.26 times more return on investment than BG Staffing. However, Hudson Technologies is 1.26 times more volatile than BG Staffing. It trades about 0.06 of its potential returns per unit of risk. BG Staffing is currently generating about -0.09 per unit of risk. If you would invest 564.00 in Hudson Technologies on November 27, 2024 and sell it today you would earn a total of 11.00 from holding Hudson Technologies or generate 1.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hudson Technologies vs. BG Staffing
Performance |
| Timeline |
| Hudson Technologies |
| BG Staffing |
Hudson Technologies and BG Staffing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hudson Technologies and BG Staffing
The main advantage of trading using opposite Hudson Technologies and BG Staffing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudson Technologies position performs unexpectedly, BG Staffing 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 BG Staffing will offset losses from the drop in BG Staffing's long position.| Hudson Technologies vs. Sensient Technologies | Hudson Technologies vs. Innospec | Hudson Technologies vs. H B Fuller | Hudson Technologies vs. Quaker Chemical |
| BG Staffing vs. Kelly Services A | BG Staffing vs. Korn Ferry | BG Staffing vs. Heidrick Struggles International | BG Staffing vs. Hudson Global |
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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