Correlation Between Vertiv Holdings and Adecco Group
Can any of the company-specific risk be diversified away by investing in both Vertiv Holdings and Adecco Group 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 Vertiv Holdings and Adecco Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vertiv Holdings Co and Adecco Group AG, you can compare the effects of market volatilities on Vertiv Holdings and Adecco Group 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 Vertiv Holdings with a short position of Adecco Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vertiv Holdings and Adecco Group.
Diversification Opportunities for Vertiv Holdings and Adecco Group
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Vertiv and Adecco is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Vertiv Holdings Co and Adecco Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adecco Group AG and Vertiv 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 Vertiv Holdings Co are associated (or correlated) with Adecco Group. 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 AG has no effect on the direction of Vertiv Holdings i.e., Vertiv Holdings and Adecco Group go up and down completely randomly.
Pair Corralation between Vertiv Holdings and Adecco Group
Considering the 90-day investment horizon Vertiv Holdings Co is expected to under-perform the Adecco Group. But the stock apears to be less risky and, when comparing its historical volatility, Vertiv Holdings Co is 1.29 times less risky than Adecco Group. The stock trades about -0.06 of its potential returns per unit of risk. The Adecco Group AG is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,545 in Adecco Group AG on November 27, 2024 and sell it today you would earn a total of 195.00 from holding Adecco Group AG or generate 7.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vertiv Holdings Co vs. Adecco Group AG
Performance |
| Timeline |
| Vertiv Holdings |
| Adecco Group AG |
Vertiv Holdings and Adecco Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vertiv Holdings and Adecco Group
The main advantage of trading using opposite Vertiv Holdings and Adecco Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vertiv Holdings position performs unexpectedly, Adecco Group 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 Group will offset losses from the drop in Adecco Group's long position.| Vertiv Holdings vs. nVent Electric PLC | Vertiv Holdings vs. Hubbell | Vertiv Holdings vs. Advanced Energy Industries | Vertiv Holdings vs. Energizer Holdings |
| Adecco Group vs. Hudson Global | Adecco Group vs. Mastech Holdings | Adecco Group vs. Kforce Inc | Adecco Group vs. Kelly Services A |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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