Correlation Between Adecco and Recruit Holdings
Can any of the company-specific risk be diversified away by investing in both Adecco and Recruit Holdings 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 Adecco and Recruit Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adecco Group and Recruit Holdings Co, you can compare the effects of market volatilities on Adecco and Recruit Holdings 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 Adecco with a short position of Recruit Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adecco and Recruit Holdings.
Diversification Opportunities for Adecco and Recruit Holdings
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Adecco and Recruit is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Adecco Group and Recruit Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Recruit Holdings and Adecco 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 Adecco Group are associated (or correlated) with Recruit Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Recruit Holdings has no effect on the direction of Adecco i.e., Adecco and Recruit Holdings go up and down completely randomly.
Pair Corralation between Adecco and Recruit Holdings
Assuming the 90 days horizon Adecco Group is expected to generate 0.53 times more return on investment than Recruit Holdings. However, Adecco Group is 1.88 times less risky than Recruit Holdings. It trades about -0.17 of its potential returns per unit of risk. Recruit Holdings Co is currently generating about -0.13 per unit of risk. If you would invest 1,806 in Adecco Group on January 25, 2024 and sell it today you would lose (98.00) from holding Adecco Group or give up 5.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adecco Group vs. Recruit Holdings Co
Performance |
| Timeline |
| Adecco Group |
| Recruit Holdings |
Adecco and Recruit Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adecco and Recruit Holdings
The main advantage of trading using opposite Adecco and Recruit Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adecco position performs unexpectedly, Recruit Holdings 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 Recruit Holdings will offset losses from the drop in Recruit Holdings' long position.| Adecco vs. The Caldwell Partners | Adecco vs. RecruiterCom Group | Adecco vs. Kforce Inc | Adecco vs. Heidrick Struggles International |
| Recruit Holdings vs. The Caldwell Partners | Recruit Holdings vs. RecruiterCom Group | Recruit Holdings vs. Kforce Inc | Recruit Holdings vs. Heidrick Struggles International |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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