Correlation Between ManpowerGroup and Hudson Global

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

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

Diversification Opportunities for ManpowerGroup and Hudson Global

-0.15

Correlation Coefficient

ManpowerGroup  Hudson Global

Good diversification

The 3 months correlation between ManpowerGroup and Hudson is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding ManpowerGroup and Hudson Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hudson Global 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 Hudson Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hudson Global has no effect on the direction of ManpowerGroup i.e., ManpowerGroup and Hudson Global go up and down completely randomly.

Pair Corralation between ManpowerGroup and Hudson Global

Considering the 90-day investment horizon ManpowerGroup is expected to generate 0.79 times more return on investment than Hudson Global. However, ManpowerGroup is 1.26 times less risky than Hudson Global. It trades about 0.04 of its potential returns per unit of risk. Hudson Global is currently generating about -0.13 per unit of risk. If you would invest  5,704  in ManpowerGroup on January 2, 2025 and sell it today you would earn a total of  173.00  from holding ManpowerGroup or generate 3.03% return on investment over 90 days.

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

ManpowerGroup  vs.  Hudson Global

ManpowerGroup

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ManpowerGroup are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, ManpowerGroup is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Hudson Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hudson Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in May 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with ManpowerGroup and Hudson Global

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

The idea behind ManpowerGroup and Hudson Global 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.