Correlation Between HNI Corp and BG Staffing
Can any of the company-specific risk be diversified away by investing in both HNI Corp 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 HNI Corp and BG Staffing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HNI Corp and BG Staffing, you can compare the effects of market volatilities on HNI Corp 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 HNI Corp with a short position of BG Staffing. Check out your portfolio center. Please also check ongoing floating volatility patterns of HNI Corp and BG Staffing.
Diversification Opportunities for HNI Corp and BG Staffing
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HNI and BGSF is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding HNI Corp and BG Staffing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BG Staffing and HNI Corp 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 HNI Corp 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 HNI Corp i.e., HNI Corp and BG Staffing go up and down completely randomly.
Pair Corralation between HNI Corp and BG Staffing
Considering the 90-day investment horizon HNI Corp is expected to generate 0.64 times more return on investment than BG Staffing. However, HNI Corp is 1.56 times less risky than BG Staffing. It trades about 0.24 of its potential returns per unit of risk. BG Staffing is currently generating about -0.47 per unit of risk. If you would invest 5,152 in HNI Corp on August 29, 2024 and sell it today you would earn a total of 537.00 from holding HNI Corp or generate 10.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HNI Corp vs. BG Staffing
Performance |
| Timeline |
| HNI Corp |
| BG Staffing |
HNI Corp and BG Staffing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HNI Corp and BG Staffing
The main advantage of trading using opposite HNI Corp and BG Staffing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HNI Corp 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.The idea behind HNI Corp and BG Staffing 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.| 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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