Correlation Between DLH Holdings and Korn Ferry

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

By analyzing existing cross correlation between DLH Holdings Corp and Korn Ferry, you can compare the effects of market volatilities on DLH Holdings and Korn Ferry 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 DLH Holdings with a short position of Korn Ferry. Check out your portfolio center. Please also check ongoing floating volatility patterns of DLH Holdings and Korn Ferry.

Diversification Opportunities for DLH Holdings and Korn Ferry

0.54

Correlation Coefficient

DLH Holdings  Korn Ferry

Very weak diversification

The 3 months correlation between DLH and Korn is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding DLH Holdings Corp and Korn Ferry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korn Ferry and DLH Holdings 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 DLH Holdings Corp are associated (or correlated) with Korn Ferry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korn Ferry has no effect on the direction of DLH Holdings i.e., DLH Holdings and Korn Ferry go up and down completely randomly.

Pair Corralation between DLH Holdings and Korn Ferry

Given the investment horizon of 90 days DLH Holdings Corp is expected to generate 1.15 times more return on investment than Korn Ferry. However, DLH Holdings is 1.15 times more volatile than Korn Ferry. It trades about -0.19 of its potential returns per unit of risk. Korn Ferry is currently generating about -0.33 per unit of risk. If you would invest  855.00  in DLH Holdings Corp on September 27, 2024 and sell it today you would lose (83.50) from holding DLH Holdings Corp or give up 9.77% of portfolio value over 90 days.

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

DLH Holdings Corp  vs.  Korn Ferry

DLH Holdings Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DLH Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Korn Ferry

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Korn Ferry has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Korn Ferry is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with DLH Holdings and Korn Ferry

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

The idea behind DLH Holdings Corp and Korn Ferry 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.