Correlation Between Spirent Communications and ManpowerGroup
Can any of the company-specific risk be diversified away by investing in both Spirent Communications 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 Spirent Communications and ManpowerGroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spirent Communications plc and ManpowerGroup, you can compare the effects of market volatilities on Spirent Communications 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 Spirent Communications with a short position of ManpowerGroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spirent Communications and ManpowerGroup.
Diversification Opportunities for Spirent Communications and ManpowerGroup
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Spirent and ManpowerGroup is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Spirent Communications plc and ManpowerGroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ManpowerGroup and Spirent Communications 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 Spirent Communications plc 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 Spirent Communications i.e., Spirent Communications and ManpowerGroup go up and down completely randomly.
Pair Corralation between Spirent Communications and ManpowerGroup
Assuming the 90 days horizon Spirent Communications plc is expected to generate 0.5 times more return on investment than ManpowerGroup. However, Spirent Communications plc is 1.99 times less risky than ManpowerGroup. It trades about 0.0 of its potential returns per unit of risk. ManpowerGroup is currently generating about -0.06 per unit of risk. If you would invest 206.00 in Spirent Communications plc on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Spirent Communications plc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spirent Communications plc vs. ManpowerGroup
Performance |
| Timeline |
| Spirent Communications |
| ManpowerGroup |
Spirent Communications and ManpowerGroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spirent Communications and ManpowerGroup
The main advantage of trading using opposite Spirent Communications and ManpowerGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spirent Communications 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.| Spirent Communications vs. Addus HomeCare | Spirent Communications vs. United Rentals | Spirent Communications vs. Hyster Yale Materials Handling | Spirent Communications vs. Corporate Office Properties |
| ManpowerGroup vs. Singapore Telecommunications Limited | ManpowerGroup vs. Ribbon Communications | ManpowerGroup vs. Spirent Communications plc | ManpowerGroup vs. Charter Communications |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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