Correlation Between TriNet and Barrett Business
Can any of the company-specific risk be diversified away by investing in both TriNet and Barrett Business 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 TriNet and Barrett Business into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TriNet Group and Barrett Business Services, you can compare the effects of market volatilities on TriNet and Barrett Business 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 TriNet with a short position of Barrett Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of TriNet and Barrett Business.
Diversification Opportunities for TriNet and Barrett Business
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between TriNet and Barrett is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding TriNet Group and Barrett Business Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrett Business Services and TriNet 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 TriNet Group are associated (or correlated) with Barrett Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrett Business Services has no effect on the direction of TriNet i.e., TriNet and Barrett Business go up and down completely randomly.
Pair Corralation between TriNet and Barrett Business
Given the investment horizon of 90 days TriNet is expected to generate 1.38 times less return on investment than Barrett Business. In addition to that, TriNet is 1.5 times more volatile than Barrett Business Services. It trades about 0.05 of its total potential returns per unit of risk. Barrett Business Services is currently generating about 0.1 per unit of volatility. If you would invest 2,308 in Barrett Business Services on September 13, 2024 and sell it today you would earn a total of 2,021 from holding Barrett Business Services or generate 87.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TriNet Group vs. Barrett Business Services
Performance |
| Timeline |
| TriNet Group |
| Barrett Business Services |
TriNet and Barrett Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TriNet and Barrett Business
The main advantage of trading using opposite TriNet and Barrett Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TriNet position performs unexpectedly, Barrett Business 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 Barrett Business will offset losses from the drop in Barrett Business' long position.| TriNet vs. ManpowerGroup | TriNet vs. Kforce Inc | TriNet vs. Kelly Services A | TriNet vs. Heidrick Struggles International |
| Barrett Business vs. Manhattan Associates | Barrett Business vs. Paycom Soft | Barrett Business vs. Clearwater Analytics Holdings | Barrett Business vs. Procore 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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