Correlation Between Adecco Group and Schindler

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

By analyzing existing cross correlation between Adecco Group AG and Schindler Ps, you can compare the effects of market volatilities on Adecco Group and Schindler 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 Adecco Group with a short position of Schindler. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adecco Group and Schindler.

Diversification Opportunities for Adecco Group and Schindler

0.43

Correlation Coefficient

Adecco Group  Schindler

Very weak diversification

The 3 months correlation between Adecco and Schindler is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Adecco Group AG and Schindler Ps in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schindler Ps and Adecco Group 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 Adecco Group AG are associated (or correlated) with Schindler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schindler Ps has no effect on the direction of Adecco Group i.e., Adecco Group and Schindler go up and down completely randomly.

Pair Corralation between Adecco Group and Schindler

Assuming the 90 days trading horizon Adecco Group AG is expected to under-perform the Schindler. In addition to that, Adecco Group is 1.51 times more volatile than Schindler Ps. It trades about 0.0 of its total potential returns per unit of risk. Schindler Ps is currently generating about 0.06 per unit of volatility. If you would invest  20,461  in Schindler Ps on December 4, 2024 and sell it today you would earn a total of  7,339  from holding Schindler Ps or generate 35.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Adecco Group AG  vs.  Schindler Ps

Adecco Group AG

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Adecco Group AG are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Adecco Group is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Schindler Ps

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Schindler Ps are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Schindler is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Adecco Group and Schindler

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

The idea behind Adecco Group AG and Schindler Ps 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.