Correlation Between KAR Auction and Korn Ferry
Can any of the company-specific risk be diversified away by investing in both KAR Auction 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 KAR Auction and Korn Ferry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KAR Auction Services and Korn Ferry, you can compare the effects of market volatilities on KAR Auction 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 KAR Auction with a short position of Korn Ferry. Check out your portfolio center. Please also check ongoing floating volatility patterns of KAR Auction and Korn Ferry.
Diversification Opportunities for KAR Auction and Korn Ferry
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between KAR and Korn is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding KAR Auction Services and Korn Ferry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korn Ferry and KAR Auction 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 KAR Auction Services 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 KAR Auction i.e., KAR Auction and Korn Ferry go up and down completely randomly.
Pair Corralation between KAR Auction and Korn Ferry
Considering the 90-day investment horizon KAR Auction is expected to generate 1.57 times less return on investment than Korn Ferry. In addition to that, KAR Auction is 1.08 times more volatile than Korn Ferry. It trades about 0.05 of its total potential returns per unit of risk. Korn Ferry is currently generating about 0.08 per unit of volatility. If you would invest 4,980 in Korn Ferry on August 31, 2024 and sell it today you would earn a total of 2,854 from holding Korn Ferry or generate 57.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
KAR Auction Services vs. Korn Ferry
Performance |
| Timeline |
| KAR Auction Services |
| Korn Ferry |
KAR Auction and Korn Ferry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KAR Auction and Korn Ferry
The main advantage of trading using opposite KAR Auction and Korn Ferry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KAR Auction 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.| KAR Auction vs. CarGurus | KAR Auction vs. Kingsway Financial Services | KAR Auction vs. Driven Brands Holdings | KAR Auction vs. Group 1 Automotive |
| Korn Ferry vs. Heidrick Struggles International | Korn Ferry vs. Kelly Services A | Korn Ferry vs. Kforce Inc | Korn Ferry vs. ManpowerGroup |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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