Correlation Between Carsales and Adecco Group
Can any of the company-specific risk be diversified away by investing in both Carsales 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 Carsales and Adecco Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CarsalesCom and Adecco Group AG, you can compare the effects of market volatilities on Carsales 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 Carsales with a short position of Adecco Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carsales and Adecco Group.
Diversification Opportunities for Carsales and Adecco Group
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Carsales and Adecco is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding CarsalesCom 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 Carsales 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 CarsalesCom 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 Carsales i.e., Carsales and Adecco Group go up and down completely randomly.
Pair Corralation between Carsales and Adecco Group
Assuming the 90 days horizon CarsalesCom is expected to generate 0.72 times more return on investment than Adecco Group. However, CarsalesCom is 1.38 times less risky than Adecco Group. It trades about 0.49 of its potential returns per unit of risk. Adecco Group AG is currently generating about -0.35 per unit of risk. If you would invest 2,260 in CarsalesCom on September 4, 2024 and sell it today you would earn a total of 280.00 from holding CarsalesCom or generate 12.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CarsalesCom vs. Adecco Group AG
Performance |
| Timeline |
| CarsalesCom |
| Adecco Group AG |
Carsales and Adecco Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carsales and Adecco Group
The main advantage of trading using opposite Carsales and Adecco Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carsales 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.| Carsales vs. BRIT AMER TOBACCO | Carsales vs. Japan Tobacco | Carsales vs. MICRONIC MYDATA | Carsales vs. FUYO GENERAL LEASE |
| Adecco Group vs. Eastman Chemical | Adecco Group vs. CarsalesCom | Adecco Group vs. CODERE ONLINE LUX | Adecco Group vs. BOS BETTER ONLINE |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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