Correlation Between ManpowerGroup and Heidrick Struggles

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

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

Diversification Opportunities for ManpowerGroup and Heidrick Struggles

0.6

Correlation Coefficient

ManpowerGroup  Heidrick Struggles

Poor diversification

The 3 months correlation between ManpowerGroup and Heidrick is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding ManpowerGroup and Heidrick Struggles Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heidrick Struggles and ManpowerGroup 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 ManpowerGroup are associated (or correlated) with Heidrick Struggles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heidrick Struggles has no effect on the direction of ManpowerGroup i.e., ManpowerGroup and Heidrick Struggles go up and down completely randomly.

Pair Corralation between ManpowerGroup and Heidrick Struggles

Considering the 90-day investment horizon ManpowerGroup is expected to under-perform the Heidrick Struggles. But the stock apears to be less risky and, when comparing its historical volatility, ManpowerGroup is 1.11 times less risky than Heidrick Struggles. The stock trades about -0.07 of its potential returns per unit of risk. The Heidrick Struggles International is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest  4,404  in Heidrick Struggles International on January 8, 2025 and sell it today you would lose (468.00) from holding Heidrick Struggles International or give up 10.63% of portfolio value over 90 days.

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

ManpowerGroup  vs.  Heidrick Struggles Internation

ManpowerGroup

Risk-Adjusted Performance

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 latest unsteady performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Heidrick Struggles

Risk-Adjusted Performance

Very Weak

Over the last 90 days Heidrick Struggles International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with ManpowerGroup and Heidrick Struggles

The main advantage of trading using opposite ManpowerGroup and Heidrick Struggles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ManpowerGroup position performs unexpectedly, Heidrick Struggles 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 Heidrick Struggles will offset losses from the drop in Heidrick Struggles' long position.

The idea behind ManpowerGroup and Heidrick Struggles International 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 CEOs Directory module to screen CEOs from public companies around the world.