Correlation Between DLH Holdings and BG Staffing
Can any of the company-specific risk be diversified away by investing in both DLH Holdings and BG Staffing 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 DLH Holdings and BG Staffing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DLH Holdings Corp and BG Staffing, you can compare the effects of market volatilities on DLH Holdings and BG Staffing 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 DLH Holdings with a short position of BG Staffing. Check out your portfolio center. Please also check ongoing floating volatility patterns of DLH Holdings and BG Staffing.
Diversification Opportunities for DLH Holdings and BG Staffing
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DLH and BGSF is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding DLH Holdings Corp and BG Staffing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BG Staffing and DLH Holdings 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 DLH Holdings Corp are associated (or correlated) with BG Staffing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BG Staffing has no effect on the direction of DLH Holdings i.e., DLH Holdings and BG Staffing go up and down completely randomly.
Pair Corralation between DLH Holdings and BG Staffing
Given the investment horizon of 90 days DLH Holdings Corp is expected to under-perform the BG Staffing. In addition to that, DLH Holdings is 1.31 times more volatile than BG Staffing. It trades about -0.63 of its total potential returns per unit of risk. BG Staffing is currently generating about -0.35 per unit of volatility. If you would invest 1,025 in BG Staffing on January 20, 2024 and sell it today you would lose (115.00) from holding BG Staffing or give up 11.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
DLH Holdings Corp vs. BG Staffing
Performance |
| Timeline |
| DLH Holdings Corp |
| BG Staffing |
DLH Holdings and BG Staffing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DLH Holdings and BG Staffing
The main advantage of trading using opposite DLH Holdings and BG Staffing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DLH Holdings position performs unexpectedly, BG Staffing 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 BG Staffing will offset losses from the drop in BG Staffing's long position.| DLH Holdings vs. ExlService Holdings | DLH Holdings vs. WNS Holdings | DLH Holdings vs. Gartner | DLH Holdings vs. The Hackett Group |
| BG Staffing vs. ExlService Holdings | BG Staffing vs. WNS Holdings | BG Staffing vs. Gartner | BG Staffing 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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