Correlation Between ManpowerGroup and Hays Plc

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

By analyzing existing cross correlation between ManpowerGroup and Hays plc, you can compare the effects of market volatilities on ManpowerGroup and Hays Plc 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 Hays Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of ManpowerGroup and Hays Plc.

Diversification Opportunities for ManpowerGroup and Hays Plc

0.16

Correlation Coefficient

ManpowerGroup  Hays Plc

Average diversification

The 3 months correlation between ManpowerGroup and Hays is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding ManpowerGroup and Hays plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hays plc 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 Hays Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hays plc has no effect on the direction of ManpowerGroup i.e., ManpowerGroup and Hays Plc go up and down completely randomly.

Pair Corralation between ManpowerGroup and Hays Plc

Assuming the 90 days horizon ManpowerGroup is expected to generate 6.72 times less return on investment than Hays Plc. But when comparing it to its historical volatility, ManpowerGroup is 1.5 times less risky than Hays Plc. It trades about 0.01 of its potential returns per unit of risk. Hays plc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  93.00  in Hays plc on December 30, 2024 and sell it today you would earn a total of  6.00  from holding Hays plc or generate 6.45% return on investment over 90 days.

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

ManpowerGroup  vs.  Hays plc

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. Despite nearly stable basic indicators, ManpowerGroup is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Hays plc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hays plc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Hays Plc may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with ManpowerGroup and Hays Plc

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

The idea behind ManpowerGroup and Hays plc 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .