Correlation Between Kanzhun and Kforce

Can any of the company-specific risk be diversified away by investing in both Kanzhun 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 Kanzhun and Kforce into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kanzhun Ltd ADR and Kforce Inc, you can compare the effects of market volatilities on Kanzhun 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 Kanzhun with a short position of Kforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kanzhun and Kforce.

Diversification Opportunities for Kanzhun and Kforce

-0.6

Correlation Coefficient

Kanzhun  Kforce

Excellent diversification

The 3 months correlation between Kanzhun and Kforce is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Kanzhun Ltd ADR and Kforce Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kforce Inc and Kanzhun 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 Kanzhun Ltd ADR 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 Kanzhun i.e., Kanzhun and Kforce go up and down completely randomly.

Pair Corralation between Kanzhun and Kforce

Allowing for the 90-day total investment horizon Kanzhun Ltd ADR is expected to generate 1.32 times more return on investment than Kforce. However, Kanzhun is 1.32 times more volatile than Kforce Inc. It trades about 0.14 of its potential returns per unit of risk. Kforce Inc is currently generating about -0.13 per unit of risk. If you would invest  2,009  in Kanzhun Ltd ADR on February 26, 2024 and sell it today you would earn a total of  112.00  from holding Kanzhun Ltd ADR or generate 5.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Kanzhun Ltd ADR  vs.  Kforce Inc

Kanzhun Ltd ADR

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kanzhun Ltd ADR are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Kanzhun showed solid returns over the last few months and may actually be approaching a breakup point.

Kforce Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kforce Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Kanzhun and Kforce

The main advantage of trading using opposite Kanzhun and Kforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kanzhun 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.

The idea behind Kanzhun Ltd ADR and Kforce Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..