Correlation Between Automatic Data and TrueBlue
Can any of the company-specific risk be diversified away by investing in both Automatic Data and TrueBlue 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 Automatic Data and TrueBlue into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Automatic Data Processing and TrueBlue, you can compare the effects of market volatilities on Automatic Data and TrueBlue 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 Automatic Data with a short position of TrueBlue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automatic Data and TrueBlue.
Diversification Opportunities for Automatic Data and TrueBlue
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Automatic and TrueBlue is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Automatic Data Processing and TrueBlue in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TrueBlue and Automatic Data 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 Automatic Data Processing are associated (or correlated) with TrueBlue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TrueBlue has no effect on the direction of Automatic Data i.e., Automatic Data and TrueBlue go up and down completely randomly.
Pair Corralation between Automatic Data and TrueBlue
Considering the 90-day investment horizon Automatic Data Processing is expected to generate 0.36 times more return on investment than TrueBlue. However, Automatic Data Processing is 2.75 times less risky than TrueBlue. It trades about 0.1 of its potential returns per unit of risk. TrueBlue is currently generating about -0.04 per unit of risk. If you would invest 20,665 in Automatic Data Processing on August 31, 2024 and sell it today you would earn a total of 10,027 from holding Automatic Data Processing or generate 48.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Automatic Data Processing vs. TrueBlue
Performance |
| Timeline |
| Automatic Data Processing |
| TrueBlue |
Automatic Data and TrueBlue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automatic Data and TrueBlue
The main advantage of trading using opposite Automatic Data and TrueBlue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automatic Data position performs unexpectedly, TrueBlue 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 TrueBlue will offset losses from the drop in TrueBlue's long position.| Automatic Data vs. Robert Half International | Automatic Data vs. Barrett Business Services | Automatic Data vs. ManpowerGroup | Automatic Data vs. Kforce Inc |
| TrueBlue vs. Heidrick Struggles International | TrueBlue vs. ManpowerGroup | TrueBlue vs. Korn Ferry | TrueBlue vs. Hudson Global |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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