Correlation Between Randstad Holdings and GEE
Can any of the company-specific risk be diversified away by investing in both Randstad Holdings and GEE 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 Randstad Holdings and GEE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Randstad Holdings NV and GEE Group, you can compare the effects of market volatilities on Randstad Holdings and GEE 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 Randstad Holdings with a short position of GEE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Randstad Holdings and GEE.
Diversification Opportunities for Randstad Holdings and GEE
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Randstad and GEE is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Randstad Holdings NV and GEE Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEE Group and Randstad Holdings 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 Randstad Holdings NV are associated (or correlated) with GEE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEE Group has no effect on the direction of Randstad Holdings i.e., Randstad Holdings and GEE go up and down completely randomly.
Pair Corralation between Randstad Holdings and GEE
Assuming the 90 days horizon Randstad Holdings is expected to generate 2.79 times less return on investment than GEE. But when comparing it to its historical volatility, Randstad Holdings NV is 4.7 times less risky than GEE. It trades about 0.16 of its potential returns per unit of risk. GEE Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 21.00 in GEE Group on November 2, 2024 and sell it today you would earn a total of 2.00 from holding GEE Group or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Randstad Holdings NV vs. GEE Group
Performance |
| Timeline |
| Randstad Holdings |
| GEE Group |
Randstad Holdings and GEE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Randstad Holdings and GEE
The main advantage of trading using opposite Randstad Holdings and GEE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Randstad Holdings position performs unexpectedly, GEE 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 GEE will offset losses from the drop in GEE's long position.| Randstad Holdings vs. The Caldwell Partners | Randstad Holdings vs. Trucept | Randstad Holdings vs. Futuris Company | Randstad Holdings vs. Hire Technologies |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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