Correlation Between Insperity and ManpowerGroup

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

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

Diversification Opportunities for Insperity and ManpowerGroup

0.61

Correlation Coefficient

Insperity  ManpowerGroup

Poor diversification

The 3 months correlation between Insperity and ManpowerGroup is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Insperity and ManpowerGroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ManpowerGroup and Insperity 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 Insperity 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 Insperity i.e., Insperity and ManpowerGroup go up and down completely randomly.

Pair Corralation between Insperity and ManpowerGroup

Assuming the 90 days horizon Insperity is expected to generate 1.53 times more return on investment than ManpowerGroup. However, Insperity is 1.53 times more volatile than ManpowerGroup. It trades about 0.01 of its potential returns per unit of risk. ManpowerGroup is currently generating about -0.06 per unit of risk. If you would invest  7,890  in Insperity on September 17, 2024 and sell it today you would lose (40.00) from holding Insperity or give up 0.51% of portfolio value over 90 days.

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

Insperity  vs.  ManpowerGroup

Insperity

Risk-Adjusted Performance

0 of 100

Very Weak

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

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 latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Insperity and ManpowerGroup

The main advantage of trading using opposite Insperity and ManpowerGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insperity 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 Insperity 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.