Correlation Between Caldwell Partners and ManpowerGroup
Can any of the company-specific risk be diversified away by investing in both Caldwell Partners 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 Caldwell Partners and ManpowerGroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Caldwell Partners and ManpowerGroup, you can compare the effects of market volatilities on Caldwell Partners 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 Caldwell Partners with a short position of ManpowerGroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caldwell Partners and ManpowerGroup.
Diversification Opportunities for Caldwell Partners and ManpowerGroup
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Caldwell and ManpowerGroup is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding The Caldwell Partners and ManpowerGroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ManpowerGroup and Caldwell Partners 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 The Caldwell Partners 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 Caldwell Partners i.e., Caldwell Partners and ManpowerGroup go up and down completely randomly.
Pair Corralation between Caldwell Partners and ManpowerGroup
Assuming the 90 days horizon The Caldwell Partners is expected to generate 2.55 times more return on investment than ManpowerGroup. However, Caldwell Partners is 2.55 times more volatile than ManpowerGroup. It trades about 0.08 of its potential returns per unit of risk. ManpowerGroup is currently generating about 0.02 per unit of risk. If you would invest 77.00 in The Caldwell Partners on August 29, 2024 and sell it today you would earn a total of 5.00 from holding The Caldwell Partners or generate 6.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Caldwell Partners vs. ManpowerGroup
Performance |
| Timeline |
| Caldwell Partners |
| ManpowerGroup |
Caldwell Partners and ManpowerGroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caldwell Partners and ManpowerGroup
The main advantage of trading using opposite Caldwell Partners and ManpowerGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caldwell Partners 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.| Caldwell Partners vs. Deere Company | Caldwell Partners vs. Columbus McKinnon | Caldwell Partners vs. Hyster Yale Materials Handling | Caldwell Partners vs. Manitowoc |
| 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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