Correlation Between Hirequest and ManpowerGroup

Can any of the company-specific risk be diversified away by investing in both Hirequest 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 Hirequest and ManpowerGroup into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hirequest and ManpowerGroup, you can compare the effects of market volatilities on Hirequest 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 Hirequest with a short position of ManpowerGroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hirequest and ManpowerGroup.

Diversification Opportunities for Hirequest and ManpowerGroup

0.05

Correlation Coefficient

Hirequest  ManpowerGroup

Significant diversification

The 3 months correlation between Hirequest and ManpowerGroup is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Hirequest and ManpowerGroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ManpowerGroup and Hirequest 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 Hirequest 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 Hirequest i.e., Hirequest and ManpowerGroup go up and down completely randomly.

Pair Corralation between Hirequest and ManpowerGroup

Considering the 90-day investment horizon Hirequest is expected to under-perform the ManpowerGroup. In addition to that, Hirequest is 1.24 times more volatile than ManpowerGroup. It trades about -0.04 of its total potential returns per unit of risk. ManpowerGroup is currently generating about 0.06 per unit of volatility. If you would invest  7,284  in ManpowerGroup on January 29, 2024 and sell it today you would earn a total of  301.00  from holding ManpowerGroup or generate 4.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Hirequest  vs.  ManpowerGroup

Hirequest

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hirequest has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Hirequest is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

ManpowerGroup

Risk-Adjusted Performance

0 of 100

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 recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Hirequest and ManpowerGroup

The main advantage of trading using opposite Hirequest and ManpowerGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hirequest 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 Hirequest 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.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.