Correlation Between Recruit Holdings and Automatic Data
Can any of the company-specific risk be diversified away by investing in both Recruit Holdings 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 Recruit Holdings and Automatic Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Recruit Holdings Co and Automatic Data Processing, you can compare the effects of market volatilities on Recruit Holdings 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 Recruit Holdings with a short position of Automatic Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Recruit Holdings and Automatic Data.
Diversification Opportunities for Recruit Holdings and Automatic Data
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Recruit and Automatic is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Recruit Holdings Co 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 Recruit 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 Recruit Holdings Co 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 Recruit Holdings i.e., Recruit Holdings and Automatic Data go up and down completely randomly.
Pair Corralation between Recruit Holdings and Automatic Data
Assuming the 90 days horizon Recruit Holdings Co is expected to generate 3.44 times more return on investment than Automatic Data. However, Recruit Holdings is 3.44 times more volatile than Automatic Data Processing. It trades about 0.07 of its potential returns per unit of risk. Automatic Data Processing is currently generating about 0.05 per unit of risk. If you would invest 3,045 in Recruit Holdings Co on September 14, 2024 and sell it today you would earn a total of 4,615 from holding Recruit Holdings Co or generate 151.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Recruit Holdings Co vs. Automatic Data Processing
Performance |
| Timeline |
| Recruit Holdings |
| Automatic Data Processing |
Recruit Holdings and Automatic Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Recruit Holdings and Automatic Data
The main advantage of trading using opposite Recruit Holdings and Automatic Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Recruit Holdings 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.| Recruit Holdings vs. Randstad Holdings NV | Recruit Holdings vs. TechnoPro Holdings | Recruit Holdings vs. GEE Group | Recruit Holdings vs. Labor Smart |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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