Correlation Between Adecco Group and Akzo Nobel

Can any of the company-specific risk be diversified away by investing in both Adecco Group and Akzo Nobel 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 Akzo Nobel 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 Akzo Nobel NV, you can compare the effects of market volatilities on Adecco Group and Akzo Nobel 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 Akzo Nobel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adecco Group and Akzo Nobel.

Diversification Opportunities for Adecco Group and Akzo Nobel

0.3

Correlation Coefficient

Adecco Group  Akzo Nobel

Weak diversification

The 3 months correlation between Adecco and Akzo is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Adecco Group AG and Akzo Nobel NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akzo Nobel NV 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 Akzo Nobel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akzo Nobel NV has no effect on the direction of Adecco Group i.e., Adecco Group and Akzo Nobel go up and down completely randomly.

Pair Corralation between Adecco Group and Akzo Nobel

Assuming the 90 days trading horizon Adecco Group AG is expected to generate 1.71 times more return on investment than Akzo Nobel. However, Adecco Group is 1.71 times more volatile than Akzo Nobel NV. It trades about 0.15 of its potential returns per unit of risk. Akzo Nobel NV is currently generating about 0.18 per unit of risk. If you would invest  2,090  in Adecco Group AG on April 22, 2025 and sell it today you would earn a total of  506.00  from holding Adecco Group AG or generate 24.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.88%
Values	Daily Returns

Adecco Group AG  vs.  Akzo Nobel NV

Adecco Group AG

Risk-Adjusted Performance

Good

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

Akzo Nobel NV

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Akzo Nobel NV are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Akzo Nobel unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Adecco Group and Akzo Nobel

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

The idea behind Adecco Group AG and Akzo Nobel NV 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..