Correlation Between AB SKF and Adecco
Can any of the company-specific risk be diversified away by investing in both AB SKF and Adecco 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 AB SKF and Adecco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AB SKF and Adecco Group, you can compare the effects of market volatilities on AB SKF and Adecco 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 AB SKF with a short position of Adecco. Check out your portfolio center. Please also check ongoing floating volatility patterns of AB SKF and Adecco.
Diversification Opportunities for AB SKF and Adecco
Good diversification
The 3 months correlation between SKFRY and Adecco is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding AB SKF and Adecco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adecco Group and AB SKF 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 AB SKF are associated (or correlated) with Adecco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adecco Group has no effect on the direction of AB SKF i.e., AB SKF and Adecco go up and down completely randomly.
Pair Corralation between AB SKF and Adecco
Assuming the 90 days horizon AB SKF is expected to generate 0.99 times more return on investment than Adecco. However, AB SKF is 1.01 times less risky than Adecco. It trades about 0.02 of its potential returns per unit of risk. Adecco Group is currently generating about -0.02 per unit of risk. If you would invest 1,755 in AB SKF on November 9, 2024 and sell it today you would earn a total of 260.00 from holding AB SKF or generate 14.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
AB SKF vs. Adecco Group
Performance |
| Timeline |
| AB SKF |
| Adecco Group |
AB SKF and Adecco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AB SKF and Adecco
The main advantage of trading using opposite AB SKF and Adecco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AB SKF position performs unexpectedly, Adecco 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 Adecco will offset losses from the drop in Adecco's long position.| AB SKF vs. Eastern Co | AB SKF vs. Hillman Solutions Corp | AB SKF vs. Techtronic Industries Ltd | AB SKF vs. Husqvarna AB |
| Adecco vs. ManpowerGroup | Adecco vs. Robert Half International | Adecco vs. Hire Technologies | Adecco vs. The Caldwell Partners |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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