Correlation Between Wolters Kluwer and Adecco Group

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

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

Diversification Opportunities for Wolters Kluwer and Adecco Group

-0.47

Correlation Coefficient

Wolters Kluwer  Adecco Group

Very good diversification

The 3 months correlation between Wolters and Adecco is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Wolters Kluwer NV and Adecco Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adecco Group AG and Wolters Kluwer 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 Wolters Kluwer NV are associated (or correlated) with Adecco Group. 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 AG has no effect on the direction of Wolters Kluwer i.e., Wolters Kluwer and Adecco Group go up and down completely randomly.

Pair Corralation between Wolters Kluwer and Adecco Group

Assuming the 90 days trading horizon Wolters Kluwer NV is expected to under-perform the Adecco Group. But the stock apears to be less risky and, when comparing its historical volatility, Wolters Kluwer NV is 2.57 times less risky than Adecco Group. The stock trades about -0.09 of its potential returns per unit of risk. The Adecco Group AG is currently generating about 0.15 of returns per unit of risk over similar time horizon. 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 Against
Strength	Very Weak
Accuracy	96.88%
Values	Daily Returns

Wolters Kluwer NV  vs.  Adecco Group AG

Wolters Kluwer NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wolters Kluwer NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Wolters Kluwer is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

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.

Pair Trading with Wolters Kluwer and Adecco Group

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

The idea behind Wolters Kluwer NV and Adecco Group AG 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.