Correlation Between Hudson Global and TriNet

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

By analyzing existing cross correlation between Hudson Global and TriNet Group, you can compare the effects of market volatilities on Hudson Global and TriNet 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 Global with a short position of TriNet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hudson Global and TriNet.

Diversification Opportunities for Hudson Global and TriNet

0.34

Correlation Coefficient

Hudson Global  TriNet

Weak diversification

The 3 months correlation between Hudson and TriNet is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Global and TriNet Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TriNet Group and Hudson Global 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 Global are associated (or correlated) with TriNet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TriNet Group has no effect on the direction of Hudson Global i.e., Hudson Global and TriNet go up and down completely randomly.

Pair Corralation between Hudson Global and TriNet

Given the investment horizon of 90 days Hudson Global is expected to under-perform the TriNet. In addition to that, Hudson Global is 1.08 times more volatile than TriNet Group. It trades about -0.03 of its total potential returns per unit of risk. TriNet Group is currently generating about 0.01 per unit of volatility. If you would invest  9,383  in TriNet Group on September 6, 2024 and sell it today you would earn a total of  8.00  from holding TriNet Group or generate 0.09% return on investment over 90 days.

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

Hudson Global  vs.  TriNet Group

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 very healthy basic indicators, Hudson Global is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

TriNet Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TriNet Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, TriNet is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Hudson Global and TriNet

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

The idea behind Hudson Global and TriNet Group 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.