Correlation Between Cross Country and Korn Ferry
Can any of the company-specific risk be diversified away by investing in both Cross Country and Korn Ferry 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 Cross Country and Korn Ferry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cross Country Healthcare and Korn Ferry, you can compare the effects of market volatilities on Cross Country and Korn Ferry 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 Cross Country with a short position of Korn Ferry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cross Country and Korn Ferry.
Diversification Opportunities for Cross Country and Korn Ferry
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cross and Korn is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Cross Country Healthcare and Korn Ferry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korn Ferry and Cross Country 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 Cross Country Healthcare are associated (or correlated) with Korn Ferry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korn Ferry has no effect on the direction of Cross Country i.e., Cross Country and Korn Ferry go up and down completely randomly.
Pair Corralation between Cross Country and Korn Ferry
Assuming the 90 days horizon Cross Country Healthcare is expected to under-perform the Korn Ferry. But the stock apears to be less risky and, when comparing its historical volatility, Cross Country Healthcare is 1.29 times less risky than Korn Ferry. The stock trades about -0.24 of its potential returns per unit of risk. The Korn Ferry is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 6,500 in Korn Ferry on December 27, 2024 and sell it today you would lose (300.00) from holding Korn Ferry or give up 4.62% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Cross Country Healthcare vs. Korn Ferry
Performance |
Timeline |
Cross Country Healthcare |
Korn Ferry |
Cross Country and Korn Ferry Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cross Country and Korn Ferry
The main advantage of trading using opposite Cross Country and Korn Ferry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cross Country position performs unexpectedly, Korn Ferry 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 Korn Ferry will offset losses from the drop in Korn Ferry's long position.Cross Country vs. NTG Nordic Transport | Cross Country vs. JD SPORTS FASH | Cross Country vs. USWE SPORTS AB | Cross Country vs. Ming Le Sports |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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