Correlation Between Korn Ferry and ManpowerGroup

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

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

Diversification Opportunities for Korn Ferry and ManpowerGroup

-0.07

Correlation Coefficient

Korn Ferry  ManpowerGroup

Good diversification

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

Pair Corralation between Korn Ferry and ManpowerGroup

Assuming the 90 days horizon Korn Ferry is expected to generate 1.17 times more return on investment than ManpowerGroup. However, Korn Ferry is 1.17 times more volatile than ManpowerGroup. It trades about 0.03 of its potential returns per unit of risk. ManpowerGroup is currently generating about -0.05 per unit of risk. If you would invest  6,044  in Korn Ferry on September 25, 2024 and sell it today you would earn a total of  356.00  from holding Korn Ferry or generate 5.89% return on investment over 90 days.

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

Korn Ferry  vs.  ManpowerGroup

Korn Ferry

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Korn Ferry has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Korn Ferry 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 fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Korn Ferry and ManpowerGroup

The main advantage of trading using opposite Korn Ferry and ManpowerGroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korn Ferry 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 Korn Ferry 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.