Correlation Between Recruit Holdings and TONGDAO LIEPGR
Can any of the company-specific risk be diversified away by investing in both Recruit Holdings and TONGDAO LIEPGR 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 Recruit Holdings and TONGDAO LIEPGR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Recruit Holdings Co and TONGDAO LIEPGR DL 0001, you can compare the effects of market volatilities on Recruit Holdings and TONGDAO LIEPGR 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 Recruit Holdings with a short position of TONGDAO LIEPGR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Recruit Holdings and TONGDAO LIEPGR.
Diversification Opportunities for Recruit Holdings and TONGDAO LIEPGR
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Recruit and TONGDAO is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Recruit Holdings Co and TONGDAO LIEPGR DL 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TONGDAO LIEPGR DL and Recruit 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 Recruit Holdings Co are associated (or correlated) with TONGDAO LIEPGR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TONGDAO LIEPGR DL has no effect on the direction of Recruit Holdings i.e., Recruit Holdings and TONGDAO LIEPGR go up and down completely randomly.
Pair Corralation between Recruit Holdings and TONGDAO LIEPGR
Assuming the 90 days horizon Recruit Holdings Co is expected to generate 0.37 times more return on investment than TONGDAO LIEPGR. However, Recruit Holdings Co is 2.69 times less risky than TONGDAO LIEPGR. It trades about -0.01 of its potential returns per unit of risk. TONGDAO LIEPGR DL 0001 is currently generating about -0.06 per unit of risk. If you would invest 6,730 in Recruit Holdings Co on November 2, 2024 and sell it today you would lose (50.00) from holding Recruit Holdings Co or give up 0.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Recruit Holdings Co vs. TONGDAO LIEPGR DL 0001
Performance |
| Timeline |
| Recruit Holdings |
| TONGDAO LIEPGR DL |
Recruit Holdings and TONGDAO LIEPGR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Recruit Holdings and TONGDAO LIEPGR
The main advantage of trading using opposite Recruit Holdings and TONGDAO LIEPGR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Recruit Holdings position performs unexpectedly, TONGDAO LIEPGR 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 TONGDAO LIEPGR will offset losses from the drop in TONGDAO LIEPGR's long position.| Recruit Holdings vs. Randstad NV | Recruit Holdings vs. Adecco Group AG | Recruit Holdings vs. PERSOL HOLDINGS LTD | Recruit Holdings vs. TRINET GROUP INC |
| TONGDAO LIEPGR vs. Recruit Holdings Co | TONGDAO LIEPGR vs. Randstad NV | TONGDAO LIEPGR vs. Adecco Group AG | TONGDAO LIEPGR vs. PERSOL HOLDINGS LTD |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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