Correlation Between Insperity and Kelly Services

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

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

Diversification Opportunities for Insperity and Kelly Services

-0.21

Correlation Coefficient

Insperity  Kelly Services

Very good diversification

The 3 months correlation between Insperity and Kelly is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Insperity 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 Insperity 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 Insperity 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 Insperity i.e., Insperity and Kelly Services go up and down completely randomly.

Pair Corralation between Insperity and Kelly Services

Considering the 90-day investment horizon Insperity is expected to generate 1.38 times more return on investment than Kelly Services. However, Insperity is 1.38 times more volatile than Kelly Services A. It trades about 0.09 of its potential returns per unit of risk. Kelly Services A is currently generating about 0.02 per unit of risk. If you would invest  7,712  in Insperity on December 26, 2024 and sell it today you would earn a total of  1,189  from holding Insperity or generate 15.42% return on investment over 90 days.

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

Insperity  vs.  Kelly Services A

Insperity

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Insperity are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Insperity reported solid returns over the last few months and may actually be approaching a breakup point.

Kelly Services A

Risk-Adjusted Performance

Very 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 Insperity and Kelly Services

The main advantage of trading using opposite Insperity and Kelly Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insperity 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 Insperity 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.