Correlation Between Korn Ferry and Trucept

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

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

Diversification Opportunities for Korn Ferry and Trucept

-0.68

Correlation Coefficient

Korn Ferry  Trucept

Excellent diversification

The 3 months correlation between Korn and Trucept is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Korn Ferry and Trucept in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trucept 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 Trucept. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trucept has no effect on the direction of Korn Ferry i.e., Korn Ferry and Trucept go up and down completely randomly.

Pair Corralation between Korn Ferry and Trucept

Considering the 90-day investment horizon Korn Ferry is expected to generate 15.53 times less return on investment than Trucept. But when comparing it to its historical volatility, Korn Ferry is 7.63 times less risky than Trucept. It trades about 0.03 of its potential returns per unit of risk. Trucept is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  3.99  in Trucept on December 28, 2024 and sell it today you would earn a total of  0.41  from holding Trucept or generate 10.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.77%
Values	Daily Returns

Korn Ferry  vs.  Trucept

Korn Ferry

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Korn Ferry are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, Korn Ferry is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Trucept

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Trucept are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile technical and fundamental indicators, Trucept reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Korn Ferry and Trucept

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

The idea behind Korn Ferry and Trucept 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.