Correlation Between Kforce and Kanzhun

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

By analyzing existing cross correlation between Kforce Inc and Kanzhun Ltd ADR, you can compare the effects of market volatilities on Kforce and Kanzhun 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 Kforce with a short position of Kanzhun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kforce and Kanzhun.

Diversification Opportunities for Kforce and Kanzhun

-0.68

Correlation Coefficient

Kforce  Kanzhun

Excellent diversification

The 3 months correlation between Kforce and Kanzhun is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Kforce Inc and Kanzhun Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kanzhun Ltd ADR and Kforce 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 Kforce Inc are associated (or correlated) with Kanzhun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kanzhun Ltd ADR has no effect on the direction of Kforce i.e., Kforce and Kanzhun go up and down completely randomly.

Pair Corralation between Kforce and Kanzhun

Given the investment horizon of 90 days Kforce Inc is expected to under-perform the Kanzhun. But the stock apears to be less risky and, when comparing its historical volatility, Kforce Inc is 1.9 times less risky than Kanzhun. The stock trades about -0.13 of its potential returns per unit of risk. The Kanzhun Ltd ADR is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  1,370  in Kanzhun Ltd ADR on December 28, 2024 and sell it today you would earn a total of  576.00  from holding Kanzhun Ltd ADR or generate 42.04% return on investment over 90 days.

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

Kforce Inc  vs.  Kanzhun Ltd ADR

Kforce Inc

Risk-Adjusted Performance

Very Weak

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

Kanzhun Ltd ADR

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kanzhun Ltd ADR are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Kanzhun showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kforce and Kanzhun

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

The idea behind Kforce Inc and Kanzhun Ltd ADR 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.