Correlation Between Broadridge Financial and Kelly Services

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

By analyzing existing cross correlation between Broadridge Financial Solutions and Kelly Services A, you can compare the effects of market volatilities on Broadridge Financial and Kelly Services 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 Broadridge Financial with a short position of Kelly Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broadridge Financial and Kelly Services.

Diversification Opportunities for Broadridge Financial and Kelly Services

-0.86

Correlation Coefficient

Broadridge Financial  Kelly Services

Pay attention - limited upside

The 3 months correlation between Broadridge and Kelly is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Broadridge Financial Solutions and Kelly Services A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kelly Services A and Broadridge Financial 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 Broadridge Financial Solutions are associated (or correlated) with Kelly Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kelly Services A has no effect on the direction of Broadridge Financial i.e., Broadridge Financial and Kelly Services go up and down completely randomly.

Pair Corralation between Broadridge Financial and Kelly Services

Allowing for the 90-day total investment horizon Broadridge Financial Solutions is expected to generate 0.31 times more return on investment than Kelly Services. However, Broadridge Financial Solutions is 3.27 times less risky than Kelly Services. It trades about 0.19 of its potential returns per unit of risk. Kelly Services A is currently generating about -0.15 per unit of risk. If you would invest  21,057  in Broadridge Financial Solutions on September 1, 2024 and sell it today you would earn a total of  2,545  from holding Broadridge Financial Solutions or generate 12.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Broadridge Financial Solutions  vs.  Kelly Services A

Broadridge Financial

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Broadridge Financial Solutions are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Broadridge Financial may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Kelly Services A

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kelly Services A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Broadridge Financial and Kelly Services

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

The idea behind Broadridge Financial Solutions and Kelly Services A 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 CEOs Directory module to screen CEOs from public companies around the world.