Correlation Between Adecco Group and Adecco

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

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

Diversification Opportunities for Adecco Group and Adecco

0.83

Correlation Coefficient

Adecco Group  Adecco

Very poor diversification

The 3 months correlation between Adecco and Adecco is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Adecco Group AG and Adecco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adecco Group and Adecco Group 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 Adecco Group AG 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 Adecco Group i.e., Adecco Group and Adecco go up and down completely randomly.

Pair Corralation between Adecco Group and Adecco

Assuming the 90 days horizon Adecco Group AG is expected to generate 1.22 times more return on investment than Adecco. However, Adecco Group is 1.22 times more volatile than Adecco Group. It trades about -0.15 of its potential returns per unit of risk. Adecco Group is currently generating about -0.19 per unit of risk. If you would invest  3,205  in Adecco Group AG on September 4, 2024 and sell it today you would lose (660.00) from holding Adecco Group AG or give up 20.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Adecco Group AG  vs.  Adecco Group

Adecco Group AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Adecco Group AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating 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.

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 fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Adecco Group and Adecco

The main advantage of trading using opposite Adecco Group and Adecco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adecco Group 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 Adecco Group AG 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..