Correlation Between DHI and ManpowerGroup

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Can any of the company-specific risk be diversified away by investing in both DHI and ManpowerGroup 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 DHI and ManpowerGroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DHI Group and ManpowerGroup, you can compare the effects of market volatilities on DHI and ManpowerGroup 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 DHI with a short position of ManpowerGroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of DHI and ManpowerGroup.

Diversification Opportunities for DHI and ManpowerGroup

-0.06
  Correlation Coefficient

Good diversification

The 3 months correlation between DHI and ManpowerGroup is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding DHI Group and ManpowerGroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ManpowerGroup and DHI 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 DHI Group are associated (or correlated) with ManpowerGroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ManpowerGroup has no effect on the direction of DHI i.e., DHI and ManpowerGroup go up and down completely randomly.

Pair Corralation between DHI and ManpowerGroup

Considering the 90-day investment horizon DHI Group is expected to under-perform the ManpowerGroup. In addition to that, DHI is 2.05 times more volatile than ManpowerGroup. It trades about -0.02 of its total potential returns per unit of risk. ManpowerGroup is currently generating about 0.0 per unit of volatility. If you would invest  8,187  in ManpowerGroup on December 30, 2023 and sell it today you would lose (423.00) from holding ManpowerGroup or give up 5.17% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

DHI Group  vs.  ManpowerGroup

 Performance 
       Timeline  
DHI Group 

Risk-Adjusted Performance

1 of 100

 
Low
 
High
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in DHI Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical indicators, DHI is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.
ManpowerGroup 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days ManpowerGroup has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, ManpowerGroup is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

DHI and ManpowerGroup Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with DHI and ManpowerGroup

The main advantage of trading using opposite DHI and ManpowerGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DHI position performs unexpectedly, ManpowerGroup 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 ManpowerGroup will offset losses from the drop in ManpowerGroup's long position.
The idea behind DHI Group and ManpowerGroup pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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