Correlation Between Euronet Worldwide and ManpowerGroup

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

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

Diversification Opportunities for Euronet Worldwide and ManpowerGroup

-0.64

Correlation Coefficient

Euronet Worldwide  ManpowerGroup

Excellent diversification

The 3 months correlation between Euronet and ManpowerGroup is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Euronet Worldwide and ManpowerGroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ManpowerGroup and Euronet Worldwide 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 Euronet Worldwide 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 Euronet Worldwide i.e., Euronet Worldwide and ManpowerGroup go up and down completely randomly.

Pair Corralation between Euronet Worldwide and ManpowerGroup

Given the investment horizon of 90 days Euronet Worldwide is expected to generate 1.15 times more return on investment than ManpowerGroup. However, Euronet Worldwide is 1.15 times more volatile than ManpowerGroup. It trades about 0.02 of its potential returns per unit of risk. ManpowerGroup is currently generating about -0.03 per unit of risk. If you would invest  9,843  in Euronet Worldwide on September 29, 2024 and sell it today you would earn a total of  617.00  from holding Euronet Worldwide or generate 6.27% return on investment over 90 days.

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

Euronet Worldwide  vs.  ManpowerGroup

Euronet Worldwide

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Euronet Worldwide are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Euronet Worldwide is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

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. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Euronet Worldwide and ManpowerGroup

The main advantage of trading using opposite Euronet Worldwide and ManpowerGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Euronet Worldwide 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 Euronet Worldwide 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.