Correlation Between Hudson Global and Heidrick Struggles

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

By analyzing existing cross correlation between Hudson Global and Heidrick Struggles International, you can compare the effects of market volatilities on Hudson Global and Heidrick Struggles 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 Heidrick Struggles. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hudson Global and Heidrick Struggles.

Diversification Opportunities for Hudson Global and Heidrick Struggles

0.46

Correlation Coefficient

Hudson Global  Heidrick Struggles

Very weak diversification

The 3 months correlation between Hudson and Heidrick is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Global and Heidrick Struggles Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heidrick Struggles 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 Heidrick Struggles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heidrick Struggles has no effect on the direction of Hudson Global i.e., Hudson Global and Heidrick Struggles go up and down completely randomly.

Pair Corralation between Hudson Global and Heidrick Struggles

Given the investment horizon of 90 days Hudson Global is expected to under-perform the Heidrick Struggles. In addition to that, Hudson Global is 2.01 times more volatile than Heidrick Struggles International. It trades about -0.2 of its total potential returns per unit of risk. Heidrick Struggles International is currently generating about -0.19 per unit of volatility. If you would invest  4,614  in Heidrick Struggles International on November 28, 2024 and sell it today you would lose (561.00) from holding Heidrick Struggles International or give up 12.16% of portfolio value over 90 days.

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

Hudson Global  vs.  Heidrick Struggles Internation

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 March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Heidrick Struggles

Risk-Adjusted Performance

Very Weak

Over the last 90 days Heidrick Struggles International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in March 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Hudson Global and Heidrick Struggles

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

The idea behind Hudson Global and Heidrick Struggles International 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..