Correlation Between Kelly Services and TrueBlue

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

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

Diversification Opportunities for Kelly Services and TrueBlue

0.46

Correlation Coefficient

Kelly Services  TrueBlue

Very weak diversification

The 3 months correlation between Kelly and TrueBlue is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Kelly Services B and TrueBlue in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TrueBlue 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 B are associated (or correlated) with TrueBlue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TrueBlue has no effect on the direction of Kelly Services i.e., Kelly Services and TrueBlue go up and down completely randomly.

Pair Corralation between Kelly Services and TrueBlue

Assuming the 90 days horizon Kelly Services B is expected to generate 0.68 times more return on investment than TrueBlue. However, Kelly Services B is 1.47 times less risky than TrueBlue. It trades about 0.0 of its potential returns per unit of risk. TrueBlue is currently generating about -0.11 per unit of risk. If you would invest  1,386  in Kelly Services B on December 29, 2024 and sell it today you would lose (32.00) from holding Kelly Services B or give up 2.31% of portfolio value over 90 days.

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

Kelly Services B  vs.  TrueBlue

Kelly Services B

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kelly Services B has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Kelly Services is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

TrueBlue

Risk-Adjusted Performance

Very Weak

Over the last 90 days TrueBlue 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 fundamental drivers remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Kelly Services and TrueBlue

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

The idea behind Kelly Services B and TrueBlue 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.