Correlation Between ABM Industries and RecruiterCom
Can any of the company-specific risk be diversified away by investing in both ABM Industries and RecruiterCom 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 ABM Industries and RecruiterCom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABM Industries Incorporated and RecruiterCom Group, you can compare the effects of market volatilities on ABM Industries and RecruiterCom 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 ABM Industries with a short position of RecruiterCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABM Industries and RecruiterCom.
Diversification Opportunities for ABM Industries and RecruiterCom
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between ABM and RecruiterCom is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding ABM Industries Incorporated and RecruiterCom Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RecruiterCom Group and ABM Industries 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 ABM Industries Incorporated are associated (or correlated) with RecruiterCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RecruiterCom Group has no effect on the direction of ABM Industries i.e., ABM Industries and RecruiterCom go up and down completely randomly.
Pair Corralation between ABM Industries and RecruiterCom
Considering the 90-day investment horizon ABM Industries Incorporated is expected to generate 0.19 times more return on investment than RecruiterCom. However, ABM Industries Incorporated is 5.15 times less risky than RecruiterCom. It trades about 0.17 of its potential returns per unit of risk. RecruiterCom Group is currently generating about 0.01 per unit of risk. If you would invest 4,105 in ABM Industries Incorporated on March 3, 2024 and sell it today you would earn a total of 622.00 from holding ABM Industries Incorporated or generate 15.15% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
ABM Industries Incorporated vs. RecruiterCom Group
Performance |
Timeline |
ABM Industries |
RecruiterCom Group |
ABM Industries and RecruiterCom Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ABM Industries and RecruiterCom
The main advantage of trading using opposite ABM Industries and RecruiterCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABM Industries position performs unexpectedly, RecruiterCom 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 RecruiterCom will offset losses from the drop in RecruiterCom's long position.ABM Industries vs. Lichen China Limited | ABM Industries vs. System1 | ABM Industries vs. XCPCNL Business Services | ABM Industries vs. Unifirst |
RecruiterCom vs. Lichen China Limited | RecruiterCom vs. System1 | RecruiterCom vs. XCPCNL Business Services | RecruiterCom vs. Unifirst |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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