Correlation Between Goldman Sachs and Adecco Group

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

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

Diversification Opportunities for Goldman Sachs and Adecco Group

-0.73

Correlation Coefficient

Goldman Sachs  Adecco Group

Pay attention - limited upside

The 3 months correlation between Goldman and Adecco is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Group and Adecco Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adecco Group AG and Goldman Sachs 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 Goldman Sachs Group are associated (or correlated) with Adecco Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adecco Group AG has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Adecco Group go up and down completely randomly.

Pair Corralation between Goldman Sachs and Adecco Group

Allowing for the 90-day total investment horizon Goldman Sachs Group is expected to under-perform the Adecco Group. But the stock apears to be less risky and, when comparing its historical volatility, Goldman Sachs Group is 1.78 times less risky than Adecco Group. The stock trades about -0.01 of its potential returns per unit of risk. The Adecco Group AG is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,545  in Adecco Group AG on December 29, 2024 and sell it today you would earn a total of  295.00  from holding Adecco Group AG or generate 11.59% return on investment over 90 days.

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

Goldman Sachs Group  vs.  Adecco Group AG

Goldman Sachs Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Goldman Sachs Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Goldman Sachs is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Adecco Group AG

Risk-Adjusted Performance

Modest

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

Pair Trading with Goldman Sachs and Adecco Group

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

The idea behind Goldman Sachs Group and Adecco Group AG 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.