Correlation Between Kelly Services and GEE
Can any of the company-specific risk be diversified away by investing in both Kelly Services and GEE 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 Kelly Services and GEE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kelly Services B and GEE Group, you can compare the effects of market volatilities on Kelly Services and GEE 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 Kelly Services with a short position of GEE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kelly Services and GEE.
Diversification Opportunities for Kelly Services and GEE
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kelly and GEE is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Kelly Services B and GEE Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEE Group and Kelly Services 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 Kelly Services B are associated (or correlated) with GEE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEE Group has no effect on the direction of Kelly Services i.e., Kelly Services and GEE go up and down completely randomly.
Pair Corralation between Kelly Services and GEE
Assuming the 90 days horizon Kelly Services B is expected to under-perform the GEE. But the stock apears to be less risky and, when comparing its historical volatility, Kelly Services B is 1.35 times less risky than GEE. The stock trades about -0.12 of its potential returns per unit of risk. The GEE Group is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 35.00 in GEE Group on September 1, 2024 and sell it today you would lose (10.00) from holding GEE Group or give up 28.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kelly Services B vs. GEE Group
Performance |
| Timeline |
| Kelly Services B |
| GEE Group |
Kelly Services and GEE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kelly Services and GEE
The main advantage of trading using opposite Kelly Services and GEE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kelly Services position performs unexpectedly, GEE 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 GEE will offset losses from the drop in GEE's long position.| Kelly Services vs. Heidrick Struggles International | Kelly Services vs. Kforce Inc | Kelly Services vs. Korn Ferry | Kelly Services vs. Kelly Services A |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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