Correlation Between AMN Healthcare and Kforce
Can any of the company-specific risk be diversified away by investing in both AMN Healthcare and Kforce 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 AMN Healthcare and Kforce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMN Healthcare Services and Kforce Inc, you can compare the effects of market volatilities on AMN Healthcare and Kforce 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 AMN Healthcare with a short position of Kforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMN Healthcare and Kforce.
Diversification Opportunities for AMN Healthcare and Kforce
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AMN and Kforce is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding AMN Healthcare Services and Kforce Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kforce Inc and AMN Healthcare 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 AMN Healthcare Services are associated (or correlated) with Kforce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kforce Inc has no effect on the direction of AMN Healthcare i.e., AMN Healthcare and Kforce go up and down completely randomly.
Pair Corralation between AMN Healthcare and Kforce
Considering the 90-day investment horizon AMN Healthcare Services is expected to under-perform the Kforce. In addition to that, AMN Healthcare is 2.34 times more volatile than Kforce Inc. It trades about -0.1 of its total potential returns per unit of risk. Kforce Inc is currently generating about -0.02 per unit of volatility. If you would invest 6,715 in Kforce Inc on August 28, 2024 and sell it today you would lose (709.00) from holding Kforce Inc or give up 10.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMN Healthcare Services vs. Kforce Inc
Performance |
| Timeline |
| AMN Healthcare Services |
| Kforce Inc |
AMN Healthcare and Kforce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMN Healthcare and Kforce
The main advantage of trading using opposite AMN Healthcare and Kforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMN Healthcare position performs unexpectedly, Kforce 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 Kforce will offset losses from the drop in Kforce's long position.| AMN Healthcare vs. Option Care Health | AMN Healthcare vs. Addus HomeCare | AMN Healthcare vs. Acadia Healthcare | AMN Healthcare vs. Encompass Health Corp |
| Kforce vs. Heidrick Struggles International | Kforce vs. ManpowerGroup | Kforce vs. Korn Ferry | Kforce vs. Hudson Global |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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