Correlation Between Robert Half and Recruit Holdings

Can any of the company-specific risk be diversified away by investing in both Robert Half 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 Robert Half and Recruit Holdings 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 Recruit Holdings Co, you can compare the effects of market volatilities on Robert Half 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 Robert Half with a short position of Recruit Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Robert Half and Recruit Holdings.

Diversification Opportunities for Robert Half and Recruit Holdings

-0.78

Correlation Coefficient

Robert Half  Recruit Holdings

Pay attention - limited upside

The 3 months correlation between Robert and Recruit is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Robert Half International and Recruit Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Recruit Holdings 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 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 Robert Half i.e., Robert Half and Recruit Holdings go up and down completely randomly.

Pair Corralation between Robert Half and Recruit Holdings

Considering the 90-day investment horizon Robert Half International is expected to under-perform the Recruit Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Robert Half International is 2.31 times less risky than Recruit Holdings. The stock trades about -0.3 of its potential returns per unit of risk. The Recruit Holdings Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  4,191  in Recruit Holdings Co on February 3, 2024 and sell it today you would earn a total of  319.00  from holding Recruit Holdings Co or generate 7.61% return on investment over 90 days.

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

Robert Half International  vs.  Recruit Holdings Co

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 uncertain 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.

Recruit Holdings

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Recruit Holdings Co are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Recruit Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Robert Half and Recruit Holdings

The main advantage of trading using opposite Robert Half and Recruit Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Robert Half 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 Robert Half International 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.