Correlation Between Chevron Corp and Adecco Group
Can any of the company-specific risk be diversified away by investing in both Chevron Corp and Adecco Group 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 Chevron Corp and Adecco Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chevron Corp and Adecco Group AG, you can compare the effects of market volatilities on Chevron Corp and Adecco Group 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 Chevron Corp with a short position of Adecco Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and Adecco Group.
Diversification Opportunities for Chevron Corp and Adecco Group
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chevron and Adecco is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and Adecco Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adecco Group AG and Chevron Corp 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 Chevron Corp are associated (or correlated) with Adecco Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adecco Group AG has no effect on the direction of Chevron Corp i.e., Chevron Corp and Adecco Group go up and down completely randomly.
Pair Corralation between Chevron Corp and Adecco Group
Considering the 90-day investment horizon Chevron Corp is expected to generate 5.68 times less return on investment than Adecco Group. But when comparing it to its historical volatility, Chevron Corp is 3.56 times less risky than Adecco Group. It trades about 0.06 of its potential returns per unit of risk. Adecco Group AG is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,545 in Adecco Group AG on November 27, 2024 and sell it today you would earn a total of 195.00 from holding Adecco Group AG or generate 7.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chevron Corp vs. Adecco Group AG
Performance |
| Timeline |
| Chevron Corp |
| Adecco Group AG |
Chevron Corp and Adecco Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and Adecco Group
The main advantage of trading using opposite Chevron Corp and Adecco Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, Adecco Group 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 Adecco Group will offset losses from the drop in Adecco Group's long position.| Chevron Corp vs. BP PLC ADR | Chevron Corp vs. Shell PLC ADR | Chevron Corp vs. Petroleo Brasileiro Petrobras | Chevron Corp vs. Suncor Energy |
| Adecco Group vs. Hudson Global | Adecco Group vs. Mastech Holdings | Adecco Group vs. Kforce Inc | Adecco Group vs. Kelly Services A |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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