Correlation Between Kforce and Addus HomeCare
Can any of the company-specific risk be diversified away by investing in both Kforce and Addus HomeCare 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 Kforce and Addus HomeCare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kforce Inc and Addus HomeCare, you can compare the effects of market volatilities on Kforce and Addus HomeCare 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 Kforce with a short position of Addus HomeCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kforce and Addus HomeCare.
Diversification Opportunities for Kforce and Addus HomeCare
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kforce and Addus is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Kforce Inc and Addus HomeCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addus HomeCare and Kforce 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 Kforce Inc are associated (or correlated) with Addus HomeCare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addus HomeCare has no effect on the direction of Kforce i.e., Kforce and Addus HomeCare go up and down completely randomly.
Pair Corralation between Kforce and Addus HomeCare
Given the investment horizon of 90 days Kforce Inc is expected to under-perform the Addus HomeCare. But the stock apears to be less risky and, when comparing its historical volatility, Kforce Inc is 1.19 times less risky than Addus HomeCare. The stock trades about -0.07 of its potential returns per unit of risk. The Addus HomeCare is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 11,827 in Addus HomeCare on September 19, 2024 and sell it today you would earn a total of 1,148 from holding Addus HomeCare or generate 9.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kforce Inc vs. Addus HomeCare
Performance |
| Timeline |
| Kforce Inc |
| Addus HomeCare |
Kforce and Addus HomeCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kforce and Addus HomeCare
The main advantage of trading using opposite Kforce and Addus HomeCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kforce position performs unexpectedly, Addus HomeCare 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 Addus HomeCare will offset losses from the drop in Addus HomeCare's long position.| Kforce vs. Heidrick Struggles International | Kforce vs. ManpowerGroup | Kforce vs. Korn Ferry | Kforce vs. Hudson Global |
| Addus HomeCare vs. ASGN Inc | Addus HomeCare vs. Kforce Inc | Addus HomeCare vs. Kelly Services A | Addus HomeCare vs. Central Garden Pet |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |