Correlation Between TrueBlue and Adecco

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

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

Diversification Opportunities for TrueBlue and Adecco

-0.22

Correlation Coefficient

TrueBlue  Adecco

Very good diversification

The 3 months correlation between TrueBlue and Adecco is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding TrueBlue and Adecco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adecco Group and TrueBlue 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 TrueBlue are associated (or correlated) with Adecco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adecco Group has no effect on the direction of TrueBlue i.e., TrueBlue and Adecco go up and down completely randomly.

Pair Corralation between TrueBlue and Adecco

Considering the 90-day investment horizon TrueBlue is expected to under-perform the Adecco. In addition to that, TrueBlue is 1.64 times more volatile than Adecco Group. It trades about -0.05 of its total potential returns per unit of risk. Adecco Group is currently generating about -0.03 per unit of volatility. If you would invest  1,619  in Adecco Group on October 23, 2024 and sell it today you would lose (439.00) from holding Adecco Group or give up 27.12% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

TrueBlue  vs.  Adecco Group

TrueBlue

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TrueBlue are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong fundamental drivers, TrueBlue is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Adecco Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adecco Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with TrueBlue and Adecco

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

The idea behind TrueBlue and Adecco 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.