Correlation Between Kforce and Hudson Global

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

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

Diversification Opportunities for Kforce and Hudson Global

0.86

Correlation Coefficient

Kforce  Hudson Global

Very poor diversification

The 3 months correlation between Kforce and Hudson is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Kforce Inc and Hudson Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudson Global and Kforce 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 Kforce Inc are associated (or correlated) with Hudson Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hudson Global has no effect on the direction of Kforce i.e., Kforce and Hudson Global go up and down completely randomly.

Pair Corralation between Kforce and Hudson Global

Given the investment horizon of 90 days Kforce Inc is expected to generate 0.69 times more return on investment than Hudson Global. However, Kforce Inc is 1.44 times less risky than Hudson Global. It trades about -0.09 of its potential returns per unit of risk. Hudson Global is currently generating about -0.13 per unit of risk. If you would invest  5,497  in Kforce Inc on January 2, 2025 and sell it today you would lose (511.00) from holding Kforce Inc or give up 9.3% of portfolio value over 90 days.

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

Kforce Inc  vs.  Hudson Global

Kforce Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kforce Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

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.

Pair Trading with Kforce and Hudson Global

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

The idea behind Kforce Inc and Hudson Global 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.