Correlation Between Labor Smart and ManpowerGroup
Can any of the company-specific risk be diversified away by investing in both Labor Smart 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 Labor Smart and ManpowerGroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Labor Smart and ManpowerGroup, you can compare the effects of market volatilities on Labor Smart 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 Labor Smart with a short position of ManpowerGroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Labor Smart and ManpowerGroup.
Diversification Opportunities for Labor Smart and ManpowerGroup
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Labor and ManpowerGroup is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Labor Smart and ManpowerGroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ManpowerGroup and Labor Smart 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 Labor Smart 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 Labor Smart i.e., Labor Smart and ManpowerGroup go up and down completely randomly.
Pair Corralation between Labor Smart and ManpowerGroup
Given the investment horizon of 90 days Labor Smart is expected to under-perform the ManpowerGroup. In addition to that, Labor Smart is 2.63 times more volatile than ManpowerGroup. It trades about -0.26 of its total potential returns per unit of risk. ManpowerGroup is currently generating about -0.04 per unit of volatility. If you would invest 5,844 in ManpowerGroup on December 4, 2024 and sell it today you would lose (89.00) from holding ManpowerGroup or give up 1.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Labor Smart vs. ManpowerGroup
Performance |
| Timeline |
| Labor Smart |
| ManpowerGroup |
Labor Smart and ManpowerGroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Labor Smart and ManpowerGroup
The main advantage of trading using opposite Labor Smart and ManpowerGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Labor Smart 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.| Labor Smart vs. HQ Global Education | Labor Smart vs. Innerscope Advertising Agency | Labor Smart vs. Amazonas Florestal | Labor Smart vs. Viper Networks |
| 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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