Correlation Between ManpowerGroup and HireRight Holdings

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

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

Diversification Opportunities for ManpowerGroup and HireRight Holdings

0.45

Correlation Coefficient

ManpowerGroup  HireRight Holdings

Very weak diversification

The 3 months correlation between ManpowerGroup and HireRight is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding ManpowerGroup and HireRight Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HireRight Holdings Corp 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 HireRight Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HireRight Holdings Corp has no effect on the direction of ManpowerGroup i.e., ManpowerGroup and HireRight Holdings go up and down completely randomly.

Pair Corralation between ManpowerGroup and HireRight Holdings

Considering the 90-day investment horizon ManpowerGroup is expected to generate 7.66 times more return on investment than HireRight Holdings. However, ManpowerGroup is 7.66 times more volatile than HireRight Holdings Corp. It trades about 0.1 of its potential returns per unit of risk. HireRight Holdings Corp is currently generating about 0.11 per unit of risk. If you would invest  7,232  in ManpowerGroup on February 13, 2024 and sell it today you would earn a total of  438.00  from holding ManpowerGroup or generate 6.06% return on investment over 90 days.

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

ManpowerGroup  vs.  HireRight Holdings Corp

ManpowerGroup

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ManpowerGroup are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, ManpowerGroup may actually be approaching a critical reversion point that can send shares even higher in June 2024.

HireRight Holdings Corp

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in HireRight Holdings Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, HireRight Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ManpowerGroup and HireRight Holdings

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

The idea behind ManpowerGroup and HireRight Holdings Corp 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.