Correlation Between Adecco and AB SKF
Can any of the company-specific risk be diversified away by investing in both Adecco and AB SKF 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 AB SKF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adecco Group and AB SKF, you can compare the effects of market volatilities on Adecco and AB SKF 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 AB SKF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adecco and AB SKF.
Diversification Opportunities for Adecco and AB SKF
Good diversification
The 3 months correlation between Adecco and SKFRY is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Adecco Group and AB SKF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB SKF 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 AB SKF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB SKF has no effect on the direction of Adecco i.e., Adecco and AB SKF go up and down completely randomly.
Pair Corralation between Adecco and AB SKF
Assuming the 90 days horizon Adecco Group is expected to under-perform the AB SKF. In addition to that, Adecco is 1.01 times more volatile than AB SKF. It trades about -0.02 of its total potential returns per unit of risk. AB SKF is currently generating about 0.02 per unit of volatility. If you would invest 1,755 in AB SKF on November 9, 2024 and sell it today you would earn a total of 260.00 from holding AB SKF or generate 14.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Adecco Group vs. AB SKF
Performance |
| Timeline |
| Adecco Group |
| AB SKF |
Adecco and AB SKF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adecco and AB SKF
The main advantage of trading using opposite Adecco and AB SKF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adecco position performs unexpectedly, AB SKF 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 AB SKF will offset losses from the drop in AB SKF's long position.| Adecco vs. ManpowerGroup | Adecco vs. Robert Half International | Adecco vs. Hire Technologies | Adecco vs. The Caldwell Partners |
| AB SKF vs. Eastern Co | AB SKF vs. Hillman Solutions Corp | AB SKF vs. Techtronic Industries Ltd | AB SKF vs. Husqvarna AB |
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 CEOs Directory module to screen CEOs from public companies around the world.
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