Correlation Between PKSHA TECHNOLOGY and ManpowerGroup

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

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

Diversification Opportunities for PKSHA TECHNOLOGY and ManpowerGroup

0.07

Correlation Coefficient

PKSHA TECHNOLOGY  ManpowerGroup

Significant diversification

The 3 months correlation between PKSHA and ManpowerGroup is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding PKSHA TECHNOLOGY INC and ManpowerGroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ManpowerGroup and PKSHA TECHNOLOGY 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 PKSHA TECHNOLOGY INC 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 PKSHA TECHNOLOGY i.e., PKSHA TECHNOLOGY and ManpowerGroup go up and down completely randomly.

Pair Corralation between PKSHA TECHNOLOGY and ManpowerGroup

Assuming the 90 days horizon PKSHA TECHNOLOGY INC is expected to under-perform the ManpowerGroup. In addition to that, PKSHA TECHNOLOGY is 1.51 times more volatile than ManpowerGroup. It trades about -0.28 of its total potential returns per unit of risk. ManpowerGroup is currently generating about -0.25 per unit of volatility. If you would invest  5,800  in ManpowerGroup on October 10, 2024 and sell it today you would lose (400.00) from holding ManpowerGroup or give up 6.9% of portfolio value over 90 days.

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

PKSHA TECHNOLOGY INC  vs.  ManpowerGroup

PKSHA TECHNOLOGY INC

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PKSHA TECHNOLOGY INC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PKSHA TECHNOLOGY may actually be approaching a critical reversion point that can send shares even higher in February 2025.

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. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with PKSHA TECHNOLOGY and ManpowerGroup

The main advantage of trading using opposite PKSHA TECHNOLOGY and ManpowerGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PKSHA TECHNOLOGY 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 PKSHA TECHNOLOGY INC 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.