Correlation Between ManpowerGroup and Recruit Holdings

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

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

Diversification Opportunities for ManpowerGroup and Recruit Holdings

-0.36

Correlation Coefficient

ManpowerGroup  Recruit Holdings

Very good diversification

The 3 months correlation between ManpowerGroup and Recruit is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding ManpowerGroup and Recruit Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Recruit Holdings 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 Recruit Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Recruit Holdings has no effect on the direction of ManpowerGroup i.e., ManpowerGroup and Recruit Holdings go up and down completely randomly.

Pair Corralation between ManpowerGroup and Recruit Holdings

Considering the 90-day investment horizon ManpowerGroup is expected to under-perform the Recruit Holdings. But the stock apears to be less risky and, when comparing its historical volatility, ManpowerGroup is 1.32 times less risky than Recruit Holdings. The stock trades about -0.06 of its potential returns per unit of risk. The Recruit Holdings Co is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  1,040  in Recruit Holdings Co on September 29, 2024 and sell it today you would earn a total of  402.00  from holding Recruit Holdings Co or generate 38.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.21%
Values	Daily Returns

ManpowerGroup  vs.  Recruit Holdings Co

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 unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Recruit Holdings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Recruit Holdings Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Recruit Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ManpowerGroup and Recruit Holdings

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

The idea behind ManpowerGroup and Recruit Holdings Co 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.