Correlation Between Kforce and Cardinal Health
Can any of the company-specific risk be diversified away by investing in both Kforce and Cardinal Health 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 Cardinal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kforce Inc and Cardinal Health, you can compare the effects of market volatilities on Kforce and Cardinal Health 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 Cardinal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kforce and Cardinal Health.
Diversification Opportunities for Kforce and Cardinal Health
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kforce and Cardinal is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Kforce Inc and Cardinal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health 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 Cardinal Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardinal Health has no effect on the direction of Kforce i.e., Kforce and Cardinal Health go up and down completely randomly.
Pair Corralation between Kforce and Cardinal Health
Given the investment horizon of 90 days Kforce Inc is expected to generate 0.99 times more return on investment than Cardinal Health. However, Kforce Inc is 1.01 times less risky than Cardinal Health. It trades about 0.01 of its potential returns per unit of risk. Cardinal Health is currently generating about -0.09 per unit of risk. If you would invest 5,904 in Kforce Inc on September 15, 2024 and sell it today you would earn a total of 14.00 from holding Kforce Inc or generate 0.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kforce Inc vs. Cardinal Health
Performance |
| Timeline |
| Kforce Inc |
| Cardinal Health |
Kforce and Cardinal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kforce and Cardinal Health
The main advantage of trading using opposite Kforce and Cardinal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kforce position performs unexpectedly, Cardinal Health 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 Cardinal Health will offset losses from the drop in Cardinal Health's long position.| Kforce vs. Heidrick Struggles International | Kforce vs. ManpowerGroup | Kforce vs. Korn Ferry | Kforce vs. Hudson Global |
| Cardinal Health vs. ASGN Inc | Cardinal Health vs. Kforce Inc | Cardinal Health vs. Kelly Services A | Cardinal Health vs. AMN Healthcare Services |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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