Correlation Between Adecco Group and TONGDAO LIEPGR

Can any of the company-specific risk be diversified away by investing in both Adecco Group and TONGDAO LIEPGR 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 TONGDAO LIEPGR 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 TONGDAO LIEPGR DL 0001, you can compare the effects of market volatilities on Adecco Group and TONGDAO LIEPGR 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 TONGDAO LIEPGR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adecco Group and TONGDAO LIEPGR.

Diversification Opportunities for Adecco Group and TONGDAO LIEPGR

0.33

Correlation Coefficient

Adecco Group  TONGDAO LIEPGR

Weak diversification

The 3 months correlation between Adecco and TONGDAO is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Adecco Group AG and TONGDAO LIEPGR DL 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TONGDAO LIEPGR DL 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 TONGDAO LIEPGR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TONGDAO LIEPGR DL has no effect on the direction of Adecco Group i.e., Adecco Group and TONGDAO LIEPGR go up and down completely randomly.

Pair Corralation between Adecco Group and TONGDAO LIEPGR

Assuming the 90 days trading horizon Adecco Group is expected to generate 1.84 times less return on investment than TONGDAO LIEPGR. But when comparing it to its historical volatility, Adecco Group AG is 2.08 times less risky than TONGDAO LIEPGR. It trades about 0.1 of its potential returns per unit of risk. TONGDAO LIEPGR DL 0001 is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  38.00  in TONGDAO LIEPGR DL 0001 on April 24, 2025 and sell it today you would earn a total of  9.00  from holding TONGDAO LIEPGR DL 0001 or generate 23.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Adecco Group AG  vs.  TONGDAO LIEPGR DL 0001

Adecco Group AG

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Adecco Group AG are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain forward indicators, Adecco Group reported solid returns over the last few months and may actually be approaching a breakup point.

TONGDAO LIEPGR DL

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in TONGDAO LIEPGR DL 0001 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, TONGDAO LIEPGR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Adecco Group and TONGDAO LIEPGR

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

The idea behind Adecco Group AG and TONGDAO LIEPGR DL 0001 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.