Correlation Between Barrett Business and ManpowerGroup
Can any of the company-specific risk be diversified away by investing in both Barrett Business and ManpowerGroup 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 Barrett Business and ManpowerGroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barrett Business Services and ManpowerGroup, you can compare the effects of market volatilities on Barrett Business and ManpowerGroup 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 Barrett Business with a short position of ManpowerGroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrett Business and ManpowerGroup.
Diversification Opportunities for Barrett Business and ManpowerGroup
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barrett and ManpowerGroup is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Barrett Business Services and ManpowerGroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ManpowerGroup and Barrett Business 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 Barrett Business Services are associated (or correlated) with ManpowerGroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ManpowerGroup has no effect on the direction of Barrett Business i.e., Barrett Business and ManpowerGroup go up and down completely randomly.
Pair Corralation between Barrett Business and ManpowerGroup
Given the investment horizon of 90 days Barrett Business Services is expected to generate 0.87 times more return on investment than ManpowerGroup. However, Barrett Business Services is 1.15 times less risky than ManpowerGroup. It trades about 0.09 of its potential returns per unit of risk. ManpowerGroup is currently generating about -0.03 per unit of risk. If you would invest 2,387 in Barrett Business Services on August 24, 2024 and sell it today you would earn a total of 1,889 from holding Barrett Business Services or generate 79.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barrett Business Services vs. ManpowerGroup
Performance |
| Timeline |
| Barrett Business Services |
| ManpowerGroup |
Barrett Business and ManpowerGroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barrett Business and ManpowerGroup
The main advantage of trading using opposite Barrett Business and ManpowerGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrett Business position performs unexpectedly, ManpowerGroup 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 ManpowerGroup will offset losses from the drop in ManpowerGroup's long position.| Barrett Business vs. Korn Ferry | Barrett Business vs. Kelly Services A | Barrett Business vs. Kforce Inc | Barrett Business vs. Hudson Global |
| ManpowerGroup vs. Kforce Inc | ManpowerGroup vs. Heidrick Struggles International | ManpowerGroup vs. Korn Ferry | ManpowerGroup 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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