Correlation Between Randstad Holdings and TechnoPro Holdings

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

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

Diversification Opportunities for Randstad Holdings and TechnoPro Holdings

-0.04

Correlation Coefficient

Randstad Holdings  TechnoPro Holdings

Good diversification

The 3 months correlation between Randstad and TechnoPro is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Randstad Holdings NV and TechnoPro Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TechnoPro Holdings and Randstad Holdings 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 Randstad Holdings NV are associated (or correlated) with TechnoPro Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TechnoPro Holdings has no effect on the direction of Randstad Holdings i.e., Randstad Holdings and TechnoPro Holdings go up and down completely randomly.

Pair Corralation between Randstad Holdings and TechnoPro Holdings

Assuming the 90 days horizon Randstad Holdings NV is expected to under-perform the TechnoPro Holdings. But the pink sheet apears to be less risky and, when comparing its historical volatility, Randstad Holdings NV is 1.33 times less risky than TechnoPro Holdings. The pink sheet trades about -0.11 of its potential returns per unit of risk. The TechnoPro Holdings is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  373.00  in TechnoPro Holdings on October 20, 2024 and sell it today you would lose (13.00) from holding TechnoPro Holdings or give up 3.49% of portfolio value over 90 days.

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

Randstad Holdings NV  vs.  TechnoPro Holdings

Randstad Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Randstad Holdings NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's forward-looking indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

TechnoPro Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TechnoPro Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, TechnoPro Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Randstad Holdings and TechnoPro Holdings

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

The idea behind Randstad Holdings NV and TechnoPro Holdings 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.