Correlation Between Adecco Group and ABB
Can any of the company-specific risk be diversified away by investing in both Adecco Group and ABB 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 Adecco Group and ABB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adecco Group AG and ABB, you can compare the effects of market volatilities on Adecco Group and ABB 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 Adecco Group with a short position of ABB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adecco Group and ABB.
Diversification Opportunities for Adecco Group and ABB
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Adecco and ABB is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Adecco Group AG and ABB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABB and Adecco Group 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 Adecco Group AG are associated (or correlated) with ABB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABB has no effect on the direction of Adecco Group i.e., Adecco Group and ABB go up and down completely randomly.
Pair Corralation between Adecco Group and ABB
Assuming the 90 days trading horizon Adecco Group AG is expected to under-perform the ABB. In addition to that, Adecco Group is 1.47 times more volatile than ABB. It trades about -0.51 of its total potential returns per unit of risk. ABB is currently generating about 0.04 per unit of volatility. If you would invest 4,916 in ABB on August 29, 2024 and sell it today you would earn a total of 38.00 from holding ABB or generate 0.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adecco Group AG vs. ABB
Performance |
| Timeline |
| Adecco Group AG |
| ABB |
Adecco Group and ABB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adecco Group and ABB
The main advantage of trading using opposite Adecco Group and ABB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adecco Group position performs unexpectedly, ABB 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 ABB will offset losses from the drop in ABB's long position.| Adecco Group vs. Swisscom AG | Adecco Group vs. Swiss Life Holding | Adecco Group vs. Swiss Re AG | Adecco Group vs. ABB |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |