Correlation Between Kforce and Staffing 360

Can any of the company-specific risk be diversified away by investing in both Kforce and Staffing 360 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 Staffing 360 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kforce Inc and Staffing 360 Solutions, you can compare the effects of market volatilities on Kforce and Staffing 360 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 Staffing 360. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kforce and Staffing 360.

Diversification Opportunities for Kforce and Staffing 360

0.14

Correlation Coefficient

Kforce  Staffing 360

Average diversification

The 3 months correlation between Kforce and Staffing is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Kforce Inc and Staffing 360 Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Staffing 360 Solutions 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 Staffing 360. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Staffing 360 Solutions has no effect on the direction of Kforce i.e., Kforce and Staffing 360 go up and down completely randomly.

Pair Corralation between Kforce and Staffing 360

Given the investment horizon of 90 days Kforce Inc is expected to under-perform the Staffing 360. But the stock apears to be less risky and, when comparing its historical volatility, Kforce Inc is 7.61 times less risky than Staffing 360. The stock trades about -0.05 of its potential returns per unit of risk. The Staffing 360 Solutions is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  212.00  in Staffing 360 Solutions on August 31, 2024 and sell it today you would earn a total of  28.00  from holding Staffing 360 Solutions or generate 13.21% return on investment over 90 days.

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

Kforce Inc  vs.  Staffing 360 Solutions

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.

Staffing 360 Solutions

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Staffing 360 Solutions are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Staffing 360 reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kforce and Staffing 360

The main advantage of trading using opposite Kforce and Staffing 360 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kforce position performs unexpectedly, Staffing 360 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 Staffing 360 will offset losses from the drop in Staffing 360's long position.

The idea behind Kforce Inc and Staffing 360 Solutions 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 Global Correlations module to find global opportunities by holding instruments from different markets.