Correlation Between Adecco Group and CarsalesCom
Can any of the company-specific risk be diversified away by investing in both Adecco Group and CarsalesCom 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 CarsalesCom 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 CarsalesCom, you can compare the effects of market volatilities on Adecco Group and CarsalesCom 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 CarsalesCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adecco Group and CarsalesCom.
Diversification Opportunities for Adecco Group and CarsalesCom
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Adecco and CarsalesCom is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Adecco Group AG and CarsalesCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarsalesCom 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 CarsalesCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarsalesCom has no effect on the direction of Adecco Group i.e., Adecco Group and CarsalesCom go up and down completely randomly.
Pair Corralation between Adecco Group and CarsalesCom
Assuming the 90 days trading horizon Adecco Group AG is expected to under-perform the CarsalesCom. In addition to that, Adecco Group is 1.01 times more volatile than CarsalesCom. It trades about -0.1 of its total potential returns per unit of risk. CarsalesCom is currently generating about 0.07 per unit of volatility. If you would invest 2,083 in CarsalesCom on September 13, 2024 and sell it today you would earn a total of 277.00 from holding CarsalesCom or generate 13.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adecco Group AG vs. CarsalesCom
Performance |
| Timeline |
| Adecco Group AG |
| CarsalesCom |
Adecco Group and CarsalesCom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adecco Group and CarsalesCom
The main advantage of trading using opposite Adecco Group and CarsalesCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adecco Group position performs unexpectedly, CarsalesCom 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 CarsalesCom will offset losses from the drop in CarsalesCom's long position.| Adecco Group vs. Apple Inc | Adecco Group vs. Apple Inc | Adecco Group vs. Apple Inc | Adecco Group vs. Apple Inc |
| CarsalesCom vs. Tencent Holdings | CarsalesCom vs. Superior Plus Corp | CarsalesCom vs. SIVERS SEMICONDUCTORS AB | CarsalesCom vs. NorAm Drilling AS |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |