Correlation Between Robert Half and Trucept

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

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

Diversification Opportunities for Robert Half and Trucept

0.14

Correlation Coefficient

Robert Half  Trucept

Average diversification

The 3 months correlation between Robert and Trucept is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Robert Half International and Trucept in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trucept and Robert Half 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 Robert Half International are associated (or correlated) with Trucept. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trucept has no effect on the direction of Robert Half i.e., Robert Half and Trucept go up and down completely randomly.

Pair Corralation between Robert Half and Trucept

Considering the 90-day investment horizon Robert Half is expected to generate 3.8 times less return on investment than Trucept. But when comparing it to its historical volatility, Robert Half International is 8.03 times less risky than Trucept. It trades about 0.18 of its potential returns per unit of risk. Trucept is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  3.80  in Trucept on September 3, 2024 and sell it today you would earn a total of  0.70  from holding Trucept or generate 18.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Robert Half International  vs.  Trucept

Robert Half International

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Robert Half International are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak technical indicators, Robert Half demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Trucept

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Trucept are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Trucept reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Robert Half and Trucept

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

The idea behind Robert Half International and Trucept 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.