Correlation Between Hudson Global and Randstad Holdings

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

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

Diversification Opportunities for Hudson Global and Randstad Holdings

-0.34

Correlation Coefficient

Hudson Global  Randstad Holdings

Very good diversification

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

Pair Corralation between Hudson Global and Randstad Holdings

Given the investment horizon of 90 days Hudson Global is expected to generate 25.36 times more return on investment than Randstad Holdings. However, Hudson Global is 25.36 times more volatile than Randstad Holdings NV. It trades about 0.04 of its potential returns per unit of risk. Randstad Holdings NV is currently generating about -0.02 per unit of risk. If you would invest  2,403  in Hudson Global on January 2, 2025 and sell it today you would lose (1,373) from holding Hudson Global or give up 57.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Hudson Global  vs.  Randstad Holdings NV

Hudson Global

Risk-Adjusted Performance

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 inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in May 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Randstad Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Randstad Holdings NV are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong forward-looking indicators, Randstad Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hudson Global and Randstad Holdings

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

The idea behind Hudson Global and Randstad Holdings NV 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.