Correlation Between Cars and Korn Ferry
Can any of the company-specific risk be diversified away by investing in both Cars 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 Cars and Korn Ferry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cars Inc and Korn Ferry, you can compare the effects of market volatilities on Cars 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 Cars with a short position of Korn Ferry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cars and Korn Ferry.
Diversification Opportunities for Cars and Korn Ferry
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cars and Korn is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Cars Inc and Korn Ferry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korn Ferry and Cars 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 Cars Inc 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 Cars i.e., Cars and Korn Ferry go up and down completely randomly.
Pair Corralation between Cars and Korn Ferry
Assuming the 90 days horizon Cars is expected to generate 3.31 times less return on investment than Korn Ferry. In addition to that, Cars is 1.12 times more volatile than Korn Ferry. It trades about 0.02 of its total potential returns per unit of risk. Korn Ferry is currently generating about 0.07 per unit of volatility. If you would invest 5,177 in Korn Ferry on September 14, 2024 and sell it today you would earn a total of 1,723 from holding Korn Ferry or generate 33.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cars Inc vs. Korn Ferry
Performance |
| Timeline |
| Cars Inc |
| Korn Ferry |
Cars and Korn Ferry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cars and Korn Ferry
The main advantage of trading using opposite Cars and Korn Ferry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cars 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.| Cars vs. Superior Plus Corp | Cars vs. SIVERS SEMICONDUCTORS AB | Cars vs. Norsk Hydro ASA | Cars vs. Reliance Steel Aluminum |
| Korn Ferry vs. INTERSHOP Communications Aktiengesellschaft | Korn Ferry vs. CITIC Telecom International | Korn Ferry vs. ADRIATIC METALS LS 013355 | Korn Ferry vs. MAROC TELECOM |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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