Correlation Between Ziprecruiter and Kforce

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

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

Diversification Opportunities for Ziprecruiter and Kforce

0.88

Correlation Coefficient

Ziprecruiter  Kforce

Very poor diversification

The 3 months correlation between Ziprecruiter and Kforce is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Ziprecruiter and Kforce Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kforce Inc and Ziprecruiter 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 Ziprecruiter 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 Ziprecruiter i.e., Ziprecruiter and Kforce go up and down completely randomly.

Pair Corralation between Ziprecruiter and Kforce

Considering the 90-day investment horizon Ziprecruiter is expected to under-perform the Kforce. In addition to that, Ziprecruiter is 1.7 times more volatile than Kforce Inc. It trades about -0.13 of its total potential returns per unit of risk. Kforce Inc is currently generating about -0.11 per unit of volatility. If you would invest  6,835  in Kforce Inc on February 26, 2024 and sell it today you would lose (688.00) from holding Kforce Inc or give up 10.07% of portfolio value over 90 days.

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

Ziprecruiter  vs.  Kforce Inc

Ziprecruiter

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ziprecruiter has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's forward indicators remain relatively invariable which may send shares a bit higher in June 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

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 inconsistent 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 Ziprecruiter and Kforce

The main advantage of trading using opposite Ziprecruiter and Kforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ziprecruiter 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 Ziprecruiter 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.