Correlation Between Adecco and TrueBlue
Can any of the company-specific risk be diversified away by investing in both Adecco 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 Adecco and TrueBlue into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adecco Group and TrueBlue, you can compare the effects of market volatilities on Adecco 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 Adecco with a short position of TrueBlue. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adecco and TrueBlue.
Diversification Opportunities for Adecco and TrueBlue
Very weak diversification
The 3 months correlation between Adecco and TrueBlue is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Adecco Group and TrueBlue in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TrueBlue 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 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 Adecco i.e., Adecco and TrueBlue go up and down completely randomly.
Pair Corralation between Adecco and TrueBlue
Assuming the 90 days horizon Adecco Group is expected to under-perform the TrueBlue. But the pink sheet apears to be less risky and, when comparing its historical volatility, Adecco Group is 1.75 times less risky than TrueBlue. The pink sheet trades about -0.51 of its potential returns per unit of risk. The TrueBlue is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 746.00 in TrueBlue on August 29, 2024 and sell it today you would lose (15.00) from holding TrueBlue or give up 2.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adecco Group vs. TrueBlue
Performance |
| Timeline |
| Adecco Group |
| TrueBlue |
Adecco and TrueBlue Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adecco and TrueBlue
The main advantage of trading using opposite Adecco and TrueBlue positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adecco 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.| Adecco vs. ManpowerGroup | Adecco vs. Robert Half International | Adecco vs. Hire Technologies | Adecco vs. The Caldwell Partners |
| TrueBlue vs. Kelly Services A | TrueBlue vs. Korn Ferry | TrueBlue vs. Heidrick Struggles International | 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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