Correlation Between ManpowerGroup and GEE

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

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

Diversification Opportunities for ManpowerGroup and GEE

0.52

Correlation Coefficient

ManpowerGroup  GEE

Very weak diversification

The 3 months correlation between ManpowerGroup and GEE is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding ManpowerGroup and GEE Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEE Group and ManpowerGroup 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 ManpowerGroup are associated (or correlated) with GEE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEE Group has no effect on the direction of ManpowerGroup i.e., ManpowerGroup and GEE go up and down completely randomly.

Pair Corralation between ManpowerGroup and GEE

Considering the 90-day investment horizon ManpowerGroup is expected to generate 0.35 times more return on investment than GEE. However, ManpowerGroup is 2.89 times less risky than GEE. It trades about 0.07 of its potential returns per unit of risk. GEE Group is currently generating about -0.09 per unit of risk. If you would invest  5,664  in ManpowerGroup on December 5, 2024 and sell it today you would earn a total of  233.00  from holding ManpowerGroup or generate 4.11% return on investment over 90 days.

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

ManpowerGroup  vs.  GEE Group

ManpowerGroup

Risk-Adjusted Performance

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 latest unsteady performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

GEE Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days GEE Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, GEE is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ManpowerGroup and GEE

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

The idea behind ManpowerGroup and GEE Group 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.