Correlation Between ManpowerGroup and Labor Smart
Can any of the company-specific risk be diversified away by investing in both ManpowerGroup and Labor Smart 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 Labor Smart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ManpowerGroup and Labor Smart, you can compare the effects of market volatilities on ManpowerGroup and Labor Smart 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 Labor Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of ManpowerGroup and Labor Smart.
Diversification Opportunities for ManpowerGroup and Labor Smart
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ManpowerGroup and Labor is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding ManpowerGroup and Labor Smart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Labor Smart 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 Labor Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Labor Smart has no effect on the direction of ManpowerGroup i.e., ManpowerGroup and Labor Smart go up and down completely randomly.
Pair Corralation between ManpowerGroup and Labor Smart
Considering the 90-day investment horizon ManpowerGroup is expected to under-perform the Labor Smart. But the stock apears to be less risky and, when comparing its historical volatility, ManpowerGroup is 11.55 times less risky than Labor Smart. The stock trades about -0.04 of its potential returns per unit of risk. The Labor Smart is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 0.05 in Labor Smart on September 14, 2024 and sell it today you would earn a total of 0.11 from holding Labor Smart or generate 220.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
ManpowerGroup vs. Labor Smart
Performance |
| Timeline |
| ManpowerGroup |
| Labor Smart |
ManpowerGroup and Labor Smart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ManpowerGroup and Labor Smart
The main advantage of trading using opposite ManpowerGroup and Labor Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ManpowerGroup position performs unexpectedly, Labor Smart 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 Labor Smart will offset losses from the drop in Labor Smart's long position.| ManpowerGroup vs. Kforce Inc | ManpowerGroup vs. Heidrick Struggles International | ManpowerGroup vs. Korn Ferry | ManpowerGroup vs. Hudson Global |
| Labor Smart vs. HQ Global Education | Labor Smart vs. Innerscope Advertising Agency | Labor Smart vs. Amazonas Florestal | Labor Smart vs. Viper Networks |
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 Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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