Correlation Between Robert Half and ManpowerGroup

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

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

Diversification Opportunities for Robert Half and ManpowerGroup

-0.37

Correlation Coefficient

Robert Half  ManpowerGroup

Very good diversification

The 3 months correlation between Robert and ManpowerGroup is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Robert Half International and ManpowerGroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ManpowerGroup and Robert Half 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 Robert Half International 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 Robert Half i.e., Robert Half and ManpowerGroup go up and down completely randomly.

Pair Corralation between Robert Half and ManpowerGroup

Considering the 90-day investment horizon Robert Half is expected to generate 1.38 times less return on investment than ManpowerGroup. But when comparing it to its historical volatility, Robert Half International is 1.05 times less risky than ManpowerGroup. It trades about 0.03 of its potential returns per unit of risk. ManpowerGroup is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  7,004  in ManpowerGroup on February 13, 2024 and sell it today you would earn a total of  763.00  from holding ManpowerGroup or generate 10.89% return on investment over 90 days.

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

Robert Half International  vs.  ManpowerGroup

Robert Half International

Risk-Adjusted Performance

0 of 100

Very Weak

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

ManpowerGroup

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ManpowerGroup are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, ManpowerGroup may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Robert Half and ManpowerGroup

The main advantage of trading using opposite Robert Half and ManpowerGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Robert Half 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 Robert Half International 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.