Correlation Between Korn Ferry and First Advantage

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

By analyzing existing cross correlation between Korn Ferry and First Advantage Corp, you can compare the effects of market volatilities on Korn Ferry and First Advantage 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 Korn Ferry with a short position of First Advantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korn Ferry and First Advantage.

Diversification Opportunities for Korn Ferry and First Advantage

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Correlation Coefficient

Korn Ferry  First Advantage

Pay attention - limited upside

The 3 months correlation between Korn and First is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Korn Ferry and First Advantage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Advantage Corp and Korn Ferry 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 Korn Ferry are associated (or correlated) with First Advantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Advantage Corp has no effect on the direction of Korn Ferry i.e., Korn Ferry and First Advantage go up and down completely randomly.

Pair Corralation between Korn Ferry and First Advantage

Considering the 90-day investment horizon Korn Ferry is expected to under-perform the First Advantage. In addition to that, Korn Ferry is 1.56 times more volatile than First Advantage Corp. It trades about -0.39 of its total potential returns per unit of risk. First Advantage Corp is currently generating about -0.27 per unit of volatility. If you would invest  1,989  in First Advantage Corp on September 24, 2024 and sell it today you would lose (141.00) from holding First Advantage Corp or give up 7.09% of portfolio value over 90 days.

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

Korn Ferry  vs.  First Advantage Corp

Korn Ferry

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Korn Ferry has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

First Advantage Corp

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Korn Ferry and First Advantage

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

The idea behind Korn Ferry and First Advantage 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.

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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.