Correlation Between Korn Ferry and Kelly Services

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

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

Diversification Opportunities for Korn Ferry and Kelly Services

0.76

Correlation Coefficient

Korn Ferry  Kelly Services

Poor diversification

The 3 months correlation between Korn and Kelly is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Korn Ferry and Kelly Services A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kelly Services A 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 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 A has no effect on the direction of Korn Ferry i.e., Korn Ferry and Kelly Services go up and down completely randomly.

Pair Corralation between Korn Ferry and Kelly Services

Considering the 90-day investment horizon Korn Ferry is expected to under-perform the Kelly Services. But the stock apears to be less risky and, when comparing its historical volatility, Korn Ferry is 1.29 times less risky than Kelly Services. The stock trades about -0.11 of its potential returns per unit of risk. The Kelly Services A is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,409  in Kelly Services A on November 19, 2024 and sell it today you would earn a total of  5.00  from holding Kelly Services A or generate 0.35% return on investment over 90 days.

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

Korn Ferry  vs.  Kelly Services A

Korn Ferry

Risk-Adjusted Performance

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.

Kelly Services A

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kelly Services A are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Kelly Services is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Korn Ferry and Kelly Services

The main advantage of trading using opposite Korn Ferry and Kelly Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korn Ferry 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 Korn Ferry and Kelly Services A 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.