Correlation Between Rentokil Initial and Kforce
Can any of the company-specific risk be diversified away by investing in both Rentokil Initial and Kforce 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 Rentokil Initial and Kforce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rentokil Initial PLC and Kforce Inc, you can compare the effects of market volatilities on Rentokil Initial and Kforce 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 Rentokil Initial with a short position of Kforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rentokil Initial and Kforce.
Diversification Opportunities for Rentokil Initial and Kforce
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Rentokil and Kforce is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Rentokil Initial PLC and Kforce Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kforce Inc and Rentokil Initial 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 Rentokil Initial PLC are associated (or correlated) with Kforce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kforce Inc has no effect on the direction of Rentokil Initial i.e., Rentokil Initial and Kforce go up and down completely randomly.
Pair Corralation between Rentokil Initial and Kforce
Considering the 90-day investment horizon Rentokil Initial PLC is expected to generate 1.26 times more return on investment than Kforce. However, Rentokil Initial is 1.26 times more volatile than Kforce Inc. It trades about 0.05 of its potential returns per unit of risk. Kforce Inc is currently generating about -0.21 per unit of risk. If you would invest 2,178 in Rentokil Initial PLC on January 16, 2025 and sell it today you would earn a total of 49.00 from holding Rentokil Initial PLC or generate 2.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rentokil Initial PLC vs. Kforce Inc
Performance |
| Timeline |
| Rentokil Initial PLC |
| Kforce Inc |
Rentokil Initial and Kforce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rentokil Initial and Kforce
The main advantage of trading using opposite Rentokil Initial and Kforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rentokil Initial position performs unexpectedly, Kforce 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 Kforce will offset losses from the drop in Kforce's long position.| Rentokil Initial vs. Cass Information Systems | Rentokil Initial vs. First Advantage Corp | Rentokil Initial vs. CBIZ Inc | Rentokil Initial vs. Civeo Corp |
| Kforce vs. Heidrick Struggles International | Kforce vs. ManpowerGroup | Kforce vs. Korn Ferry | Kforce vs. Hudson Global |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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