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

0.51

Correlation Coefficient

BG Staffing  Hudson Global

Very weak diversification

The 3 months correlation between BGSF and Hudson is 0.51. 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. In addition to that, BG Staffing is 1.21 times more volatile than Hudson Global. It trades about -0.1 of its total potential returns per unit of risk. Hudson Global is currently generating about -0.04 per unit of volatility. If you would invest  1,625  in Hudson Global on September 13, 2024 and sell it today you would lose (149.00) from holding Hudson Global or give up 9.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

BG Staffing  vs.  Hudson Global

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.

Hudson Global

Risk-Adjusted Performance

0 of 100

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 inconsistent 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 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.

The idea behind BG Staffing 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.