Correlation Between Kforce and Kelly Services

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

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

Diversification Opportunities for Kforce and Kelly Services

0.44

Correlation Coefficient

Kforce  Kelly Services

Very weak diversification

The 3 months correlation between Kforce and Kelly is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Kforce Inc and Kelly Services B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kelly Services B 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 Kelly Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kelly Services B has no effect on the direction of Kforce i.e., Kforce and Kelly Services go up and down completely randomly.

Pair Corralation between Kforce and Kelly Services

Given the investment horizon of 90 days Kforce Inc is expected to under-perform the Kelly Services. But the stock apears to be less risky and, when comparing its historical volatility, Kforce Inc is 1.75 times less risky than Kelly Services. The stock trades about -0.12 of its potential returns per unit of risk. The Kelly Services B is currently generating about 0.0 of returns per unit of risk over similar time horizon. 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

Kforce Inc  vs.  Kelly Services B

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 latest inconsistent performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

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.

Pair Trading with Kforce and Kelly Services

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

The idea behind Kforce Inc and Kelly Services B 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.