Correlation Between Kelly Services and Manhattan Associates

Can any of the company-specific risk be diversified away by investing in both Kelly Services and Manhattan Associates 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 Manhattan Associates 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 Manhattan Associates, you can compare the effects of market volatilities on Kelly Services and Manhattan Associates 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 Manhattan Associates. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kelly Services and Manhattan Associates.

Diversification Opportunities for Kelly Services and Manhattan Associates

-0.34

Correlation Coefficient

Kelly Services  Manhattan Associates

Very good diversification

The 3 months correlation between Kelly and Manhattan is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Kelly Services A and Manhattan Associates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manhattan Associates 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 Manhattan Associates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manhattan Associates has no effect on the direction of Kelly Services i.e., Kelly Services and Manhattan Associates go up and down completely randomly.

Pair Corralation between Kelly Services and Manhattan Associates

Assuming the 90 days horizon Kelly Services A is expected to under-perform the Manhattan Associates. But the stock apears to be less risky and, when comparing its historical volatility, Kelly Services A is 1.22 times less risky than Manhattan Associates. The stock trades about -0.2 of its potential returns per unit of risk. The Manhattan Associates is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  27,074  in Manhattan Associates on September 20, 2024 and sell it today you would earn a total of  1,180  from holding Manhattan Associates or generate 4.36% return on investment over 90 days.

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

Kelly Services A  vs.  Manhattan Associates

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 inconsistent 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.

Manhattan Associates

Risk-Adjusted Performance

2 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Manhattan Associates are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Manhattan Associates is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Kelly Services and Manhattan Associates

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

The idea behind Kelly Services A and Manhattan Associates 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.

Check out your portfolio center.

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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..