Correlation Between PageGroup Plc and Insperity

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

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

Diversification Opportunities for PageGroup Plc and Insperity

0.05

Correlation Coefficient

PageGroup Plc  Insperity

Significant diversification

The 3 months correlation between PageGroup and Insperity is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding PageGroup plc and Insperity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insperity and PageGroup Plc 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 PageGroup plc are associated (or correlated) with Insperity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insperity has no effect on the direction of PageGroup Plc i.e., PageGroup Plc and Insperity go up and down completely randomly.

Pair Corralation between PageGroup Plc and Insperity

Assuming the 90 days horizon PageGroup plc is expected to under-perform the Insperity. But the stock apears to be less risky and, when comparing its historical volatility, PageGroup plc is 1.49 times less risky than Insperity. The stock trades about -0.02 of its potential returns per unit of risk. The Insperity is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  7,199  in Insperity on December 30, 2024 and sell it today you would earn a total of  801.00  from holding Insperity or generate 11.13% return on investment over 90 days.

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

PageGroup plc  vs.  Insperity

PageGroup plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days PageGroup plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, PageGroup Plc is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Insperity

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Insperity are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Insperity reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PageGroup Plc and Insperity

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

The idea behind PageGroup plc and Insperity 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.