Correlation Between Adecco Group and Clariant
Can any of the company-specific risk be diversified away by investing in both Adecco Group and Clariant 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 Clariant 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 Clariant AG, you can compare the effects of market volatilities on Adecco Group and Clariant 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 Clariant. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adecco Group and Clariant.
Diversification Opportunities for Adecco Group and Clariant
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Adecco and Clariant is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Adecco Group AG and Clariant AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clariant AG 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 Clariant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clariant AG has no effect on the direction of Adecco Group i.e., Adecco Group and Clariant go up and down completely randomly.
Pair Corralation between Adecco Group and Clariant
Assuming the 90 days trading horizon Adecco Group AG is expected to under-perform the Clariant. In addition to that, Adecco Group is 1.46 times more volatile than Clariant AG. It trades about -0.08 of its total potential returns per unit of risk. Clariant AG is currently generating about 0.08 per unit of volatility. If you would invest 1,010 in Clariant AG on November 7, 2024 and sell it today you would earn a total of 18.00 from holding Clariant AG or generate 1.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 91.3% |
| Values | Daily Returns |
Adecco Group AG vs. Clariant AG
Performance |
| Timeline |
| Adecco Group AG |
| Clariant AG |
Adecco Group and Clariant Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adecco Group and Clariant
The main advantage of trading using opposite Adecco Group and Clariant positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adecco Group position performs unexpectedly, Clariant 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 Clariant will offset losses from the drop in Clariant'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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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