Correlation Between Adecco and Hirequest
Can any of the company-specific risk be diversified away by investing in both Adecco and Hirequest 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 and Hirequest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adecco Group and Hirequest, you can compare the effects of market volatilities on Adecco and Hirequest 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 with a short position of Hirequest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adecco and Hirequest.
Diversification Opportunities for Adecco and Hirequest
Very good diversification
The 3 months correlation between Adecco and Hirequest is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Adecco Group and Hirequest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hirequest and Adecco 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 are associated (or correlated) with Hirequest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hirequest has no effect on the direction of Adecco i.e., Adecco and Hirequest go up and down completely randomly.
Pair Corralation between Adecco and Hirequest
Assuming the 90 days horizon Adecco Group is expected to under-perform the Hirequest. But the pink sheet apears to be less risky and, when comparing its historical volatility, Adecco Group is 1.4 times less risky than Hirequest. The pink sheet trades about -0.29 of its potential returns per unit of risk. The Hirequest is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,439 in Hirequest on August 25, 2024 and sell it today you would earn a total of 88.00 from holding Hirequest or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adecco Group vs. Hirequest
Performance |
| Timeline |
| Adecco Group |
| Hirequest |
Adecco and Hirequest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adecco and Hirequest
The main advantage of trading using opposite Adecco and Hirequest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adecco position performs unexpectedly, Hirequest 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 Hirequest will offset losses from the drop in Hirequest's long position.| Adecco vs. ManpowerGroup | Adecco vs. Robert Half International | Adecco vs. Hire Technologies | Adecco vs. The Caldwell Partners |
| Hirequest vs. Kelly Services B | Hirequest vs. Kforce Inc | Hirequest vs. Heidrick Struggles International | Hirequest 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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