Correlation Between Kelly Services and Amedisys

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

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

Diversification Opportunities for Kelly Services and Amedisys

0.93

Correlation Coefficient

Kelly Services  Amedisys

Almost no diversification

The 3 months correlation between Kelly and Amedisys is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Kelly Services A and Amedisys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amedisys and Kelly Services 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 Kelly Services A are associated (or correlated) with Amedisys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amedisys has no effect on the direction of Kelly Services i.e., Kelly Services and Amedisys go up and down completely randomly.

Pair Corralation between Kelly Services and Amedisys

Assuming the 90 days horizon Kelly Services A is expected to under-perform the Amedisys. In addition to that, Kelly Services is 1.3 times more volatile than Amedisys. It trades about -0.17 of its total potential returns per unit of risk. Amedisys is currently generating about -0.22 per unit of volatility. If you would invest  9,016  in Amedisys on September 22, 2024 and sell it today you would lose (569.00) from holding Amedisys or give up 6.31% of portfolio value over 90 days.

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

Kelly Services A  vs.  Amedisys

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 January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Amedisys

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amedisys has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental 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.

Pair Trading with Kelly Services and Amedisys

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

The idea behind Kelly Services A and Amedisys 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.