Correlation Between BG Staffing and DHI
Can any of the company-specific risk be diversified away by investing in both BG Staffing and DHI 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 DHI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BG Staffing and DHI Group, you can compare the effects of market volatilities on BG Staffing and DHI 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 DHI. Check out your portfolio center. Please also check ongoing floating volatility patterns of BG Staffing and DHI.
Diversification Opportunities for BG Staffing and DHI
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BGSF and DHI is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding BG Staffing and DHI Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DHI Group 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 DHI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DHI Group has no effect on the direction of BG Staffing i.e., BG Staffing and DHI go up and down completely randomly.
Pair Corralation between BG Staffing and DHI
Given the investment horizon of 90 days BG Staffing is expected to under-perform the DHI. But the stock apears to be less risky and, when comparing its historical volatility, BG Staffing is 2.53 times less risky than DHI. The stock trades about -0.46 of its potential returns per unit of risk. The DHI Group is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 260.00 in DHI Group on January 27, 2024 and sell it today you would lose (11.00) from holding DHI Group or give up 4.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BG Staffing vs. DHI Group
Performance |
| Timeline |
| BG Staffing |
| DHI Group |
BG Staffing and DHI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BG Staffing and DHI
The main advantage of trading using opposite BG Staffing and DHI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BG Staffing position performs unexpectedly, DHI 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 DHI will offset losses from the drop in DHI's long position.| BG Staffing vs. Barrett Business Services | BG Staffing vs. Kforce Inc | BG Staffing vs. Korn Ferry | BG Staffing vs. TrueBlue |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |