Correlation Between TechnoPro Holdings and ManpowerGroup

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

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

Diversification Opportunities for TechnoPro Holdings and ManpowerGroup

0.17

Correlation Coefficient

TechnoPro Holdings  ManpowerGroup

Average diversification

The 3 months correlation between TechnoPro and ManpowerGroup is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding TechnoPro Holdings and ManpowerGroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ManpowerGroup and TechnoPro 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 TechnoPro Holdings are associated (or correlated) with ManpowerGroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ManpowerGroup has no effect on the direction of TechnoPro Holdings i.e., TechnoPro Holdings and ManpowerGroup go up and down completely randomly.

Pair Corralation between TechnoPro Holdings and ManpowerGroup

Assuming the 90 days horizon TechnoPro Holdings is expected to generate 0.9 times more return on investment than ManpowerGroup. However, TechnoPro Holdings is 1.11 times less risky than ManpowerGroup. It trades about 0.15 of its potential returns per unit of risk. ManpowerGroup is currently generating about 0.03 per unit of risk. If you would invest  376.00  in TechnoPro Holdings on December 24, 2024 and sell it today you would earn a total of  54.00  from holding TechnoPro Holdings or generate 14.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

TechnoPro Holdings  vs.  ManpowerGroup

TechnoPro Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TechnoPro Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, TechnoPro Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

ManpowerGroup

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ManpowerGroup are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, ManpowerGroup is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with TechnoPro Holdings and ManpowerGroup

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

The idea behind TechnoPro Holdings and ManpowerGroup 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.