Correlation Between Barrett Business and Kelly Services
Can any of the company-specific risk be diversified away by investing in both Barrett Business and Kelly Services 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 Barrett Business and Kelly Services into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barrett Business Services and Kelly Services A, you can compare the effects of market volatilities on Barrett Business and Kelly Services 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 Barrett Business with a short position of Kelly Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barrett Business and Kelly Services.
Diversification Opportunities for Barrett Business and Kelly Services
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barrett and Kelly is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Barrett Business Services and Kelly Services A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kelly Services A and Barrett Business 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 Barrett Business Services are associated (or correlated) with Kelly Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kelly Services A has no effect on the direction of Barrett Business i.e., Barrett Business and Kelly Services go up and down completely randomly.
Pair Corralation between Barrett Business and Kelly Services
Given the investment horizon of 90 days Barrett Business Services is expected to generate 0.82 times more return on investment than Kelly Services. However, Barrett Business Services is 1.22 times less risky than Kelly Services. It trades about -0.06 of its potential returns per unit of risk. Kelly Services A is currently generating about -0.08 per unit of risk. If you would invest 12,541 in Barrett Business Services on January 25, 2024 and sell it today you would lose (194.00) from holding Barrett Business Services or give up 1.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barrett Business Services vs. Kelly Services A
Performance |
| Timeline |
| Barrett Business Services |
| Kelly Services A |
Barrett Business and Kelly Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barrett Business and Kelly Services
The main advantage of trading using opposite Barrett Business and Kelly Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barrett Business position performs unexpectedly, Kelly Services 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 Kelly Services will offset losses from the drop in Kelly Services' long position.| Barrett Business vs. Kforce Inc | Barrett Business vs. TrueBlue | Barrett Business vs. Ziprecruiter | Barrett Business vs. Kanzhun Ltd ADR |
| Kelly Services vs. Kforce Inc | Kelly Services vs. TrueBlue | Kelly Services vs. Ziprecruiter | Kelly Services vs. Kanzhun Ltd ADR |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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