Correlation Between ManpowerGroup and Automatic Data
Can any of the company-specific risk be diversified away by investing in both ManpowerGroup and Automatic Data 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 ManpowerGroup and Automatic Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ManpowerGroup and Automatic Data Processing, you can compare the effects of market volatilities on ManpowerGroup and Automatic Data 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 ManpowerGroup with a short position of Automatic Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of ManpowerGroup and Automatic Data.
Diversification Opportunities for ManpowerGroup and Automatic Data
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ManpowerGroup and Automatic is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding ManpowerGroup and Automatic Data Processing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automatic Data Processing and ManpowerGroup 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 ManpowerGroup are associated (or correlated) with Automatic Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automatic Data Processing has no effect on the direction of ManpowerGroup i.e., ManpowerGroup and Automatic Data go up and down completely randomly.
Pair Corralation between ManpowerGroup and Automatic Data
Considering the 90-day investment horizon ManpowerGroup is expected to under-perform the Automatic Data. In addition to that, ManpowerGroup is 1.13 times more volatile than Automatic Data Processing. It trades about -0.06 of its total potential returns per unit of risk. Automatic Data Processing is currently generating about 0.18 per unit of volatility. If you would invest 29,004 in Automatic Data Processing on August 24, 2024 and sell it today you would earn a total of 1,555 from holding Automatic Data Processing or generate 5.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ManpowerGroup vs. Automatic Data Processing
Performance |
| Timeline |
| ManpowerGroup |
| Automatic Data Processing |
ManpowerGroup and Automatic Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ManpowerGroup and Automatic Data
The main advantage of trading using opposite ManpowerGroup and Automatic Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ManpowerGroup position performs unexpectedly, Automatic Data 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 Automatic Data will offset losses from the drop in Automatic Data's long position.| ManpowerGroup vs. Kforce Inc | ManpowerGroup vs. Heidrick Struggles International | ManpowerGroup vs. Korn Ferry | ManpowerGroup vs. Hudson Global |
| Automatic Data vs. Robert Half International | Automatic Data vs. Barrett Business Services | Automatic Data vs. ManpowerGroup | Automatic Data vs. Kforce Inc |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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