Correlation Between BG Staffing and DLH Holdings
Can any of the company-specific risk be diversified away by investing in both BG Staffing and DLH Holdings 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 DLH Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BG Staffing and DLH Holdings Corp, you can compare the effects of market volatilities on BG Staffing and DLH Holdings 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 DLH Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of BG Staffing and DLH Holdings.
Diversification Opportunities for BG Staffing and DLH Holdings
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BGSF and DLH is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding BG Staffing and DLH Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DLH Holdings Corp 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 DLH Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DLH Holdings Corp has no effect on the direction of BG Staffing i.e., BG Staffing and DLH Holdings go up and down completely randomly.
Pair Corralation between BG Staffing and DLH Holdings
Given the investment horizon of 90 days BG Staffing is expected to under-perform the DLH Holdings. But the stock apears to be less risky and, when comparing its historical volatility, BG Staffing is 1.37 times less risky than DLH Holdings. The stock trades about -0.01 of its potential returns per unit of risk. The DLH Holdings Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,534 in DLH Holdings Corp on January 20, 2024 and sell it today you would lose (407.00) from holding DLH Holdings Corp or give up 26.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BG Staffing vs. DLH Holdings Corp
Performance |
| Timeline |
| BG Staffing |
| DLH Holdings Corp |
BG Staffing and DLH Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BG Staffing and DLH Holdings
The main advantage of trading using opposite BG Staffing and DLH Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BG Staffing position performs unexpectedly, DLH Holdings 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 DLH Holdings will offset losses from the drop in DLH Holdings' long position.| BG Staffing vs. ExlService Holdings | BG Staffing vs. WNS Holdings | BG Staffing vs. Gartner | BG Staffing vs. The Hackett Group |
| DLH Holdings vs. ExlService Holdings | DLH Holdings vs. WNS Holdings | DLH Holdings vs. Gartner | DLH Holdings vs. The Hackett Group |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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