Correlation Between ManpowerGroup and Robert Half

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

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

Diversification Opportunities for ManpowerGroup and Robert Half

-0.49

Correlation Coefficient

ManpowerGroup  Robert Half

Very good diversification

The 3 months correlation between ManpowerGroup and Robert is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding ManpowerGroup and Robert Half International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robert Half International 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 Robert Half. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Robert Half International has no effect on the direction of ManpowerGroup i.e., ManpowerGroup and Robert Half go up and down completely randomly.

Pair Corralation between ManpowerGroup and Robert Half

Assuming the 90 days horizon ManpowerGroup is expected to under-perform the Robert Half. But the stock apears to be less risky and, when comparing its historical volatility, ManpowerGroup is 1.07 times less risky than Robert Half. The stock trades about -0.4 of its potential returns per unit of risk. The Robert Half International is currently generating about -0.19 of returns per unit of risk over similar time horizon. If you would invest  7,200  in Robert Half International on September 27, 2024 and sell it today you would lose (350.00) from holding Robert Half International or give up 4.86% of portfolio value over 90 days.

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

ManpowerGroup  vs.  Robert Half International

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.

Robert Half International

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Robert Half International are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Robert Half reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ManpowerGroup and Robert Half

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

The idea behind ManpowerGroup and Robert Half International 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.

Check out your portfolio center.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.