Correlation Between Kforce and Joint Corp

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

By analyzing existing cross correlation between Kforce Inc and The Joint Corp, you can compare the effects of market volatilities on Kforce and Joint Corp 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 Joint Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kforce and Joint Corp.

Diversification Opportunities for Kforce and Joint Corp

0.57

Correlation Coefficient

Kforce  Joint Corp

Very weak diversification

The 3 months correlation between Kforce and Joint is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Kforce Inc and The Joint Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joint Corp 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 Joint Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Joint Corp has no effect on the direction of Kforce i.e., Kforce and Joint Corp go up and down completely randomly.

Pair Corralation between Kforce and Joint Corp

Given the investment horizon of 90 days Kforce Inc is expected to generate 0.48 times more return on investment than Joint Corp. However, Kforce Inc is 2.09 times less risky than Joint Corp. It trades about 0.02 of its potential returns per unit of risk. The Joint Corp is currently generating about 0.0 per unit of risk. If you would invest  5,229  in Kforce Inc on September 13, 2024 and sell it today you would earn a total of  779.00  from holding Kforce Inc or generate 14.9% return on investment over 90 days.

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

Kforce Inc  vs.  The Joint Corp

Kforce Inc

Risk-Adjusted Performance

0 of 100

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 rather sound basic indicators, Kforce is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Joint Corp

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days The Joint Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Joint Corp is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Kforce and Joint Corp

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

The idea behind Kforce Inc and The Joint Corp 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.