Correlation Between TRINET GROUP and Recruit Holdings

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

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

Diversification Opportunities for TRINET GROUP and Recruit Holdings

0.66

Correlation Coefficient

TRINET GROUP  Recruit Holdings

Poor diversification

The 3 months correlation between TRINET and Recruit is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding TRINET GROUP INC and Recruit Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Recruit Holdings and TRINET 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 TRINET GROUP INC are associated (or correlated) with Recruit Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Recruit Holdings has no effect on the direction of TRINET GROUP i.e., TRINET GROUP and Recruit Holdings go up and down completely randomly.

Pair Corralation between TRINET GROUP and Recruit Holdings

Assuming the 90 days horizon TRINET GROUP INC is expected to under-perform the Recruit Holdings. But the stock apears to be less risky and, when comparing its historical volatility, TRINET GROUP INC is 1.46 times less risky than Recruit Holdings. The stock trades about -0.18 of its potential returns per unit of risk. The Recruit Holdings Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  4,367  in Recruit Holdings Co on April 24, 2025 and sell it today you would earn a total of  204.00  from holding Recruit Holdings Co or generate 4.67% return on investment over 90 days.

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

TRINET GROUP INC  vs.  Recruit Holdings Co

TRINET GROUP INC

Risk-Adjusted Performance

Very Weak

Over the last 90 days TRINET GROUP INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Recruit Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Recruit Holdings Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Recruit Holdings may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with TRINET GROUP and Recruit Holdings

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

The idea behind TRINET GROUP INC and Recruit Holdings Co 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.