Correlation Between BG Staffing and Hirequest

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

By analyzing existing cross correlation between BG Staffing and Hirequest, you can compare the effects of market volatilities on BG Staffing and Hirequest 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 Hirequest. Check out your portfolio center. Please also check ongoing floating volatility patterns of BG Staffing and Hirequest.

Diversification Opportunities for BG Staffing and Hirequest

-0.74

Correlation Coefficient

BG Staffing  Hirequest

Pay attention - limited upside

The 3 months correlation between BGSF and Hirequest is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding BG Staffing and Hirequest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hirequest 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 Hirequest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hirequest has no effect on the direction of BG Staffing i.e., BG Staffing and Hirequest go up and down completely randomly.

Pair Corralation between BG Staffing and Hirequest

Given the investment horizon of 90 days BG Staffing is expected to under-perform the Hirequest. In addition to that, BG Staffing is 1.35 times more volatile than Hirequest. It trades about -0.13 of its total potential returns per unit of risk. Hirequest is currently generating about 0.03 per unit of volatility. If you would invest  1,442  in Hirequest on September 12, 2024 and sell it today you would earn a total of  51.00  from holding Hirequest or generate 3.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

BG Staffing  vs.  Hirequest

BG Staffing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BG Staffing has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Hirequest

Risk-Adjusted Performance

2 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hirequest are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Hirequest is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with BG Staffing and Hirequest

The main advantage of trading using opposite BG Staffing and Hirequest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BG Staffing position performs unexpectedly, Hirequest 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 Hirequest will offset losses from the drop in Hirequest's long position.

The idea behind BG Staffing and Hirequest 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.