Correlation Between Automatic Data and Korn Ferry
Can any of the company-specific risk be diversified away by investing in both Automatic Data and Korn Ferry 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 Automatic Data and Korn Ferry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Automatic Data Processing and Korn Ferry, you can compare the effects of market volatilities on Automatic Data and Korn Ferry 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 Automatic Data with a short position of Korn Ferry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automatic Data and Korn Ferry.
Diversification Opportunities for Automatic Data and Korn Ferry
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Automatic and Korn is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Automatic Data Processing and Korn Ferry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korn Ferry and Automatic Data 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 Automatic Data Processing are associated (or correlated) with Korn Ferry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korn Ferry has no effect on the direction of Automatic Data i.e., Automatic Data and Korn Ferry go up and down completely randomly.
Pair Corralation between Automatic Data and Korn Ferry
Considering the 90-day investment horizon Automatic Data is expected to generate 2.37 times less return on investment than Korn Ferry. But when comparing it to its historical volatility, Automatic Data Processing is 1.27 times less risky than Korn Ferry. It trades about 0.02 of its potential returns per unit of risk. Korn Ferry is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,426 in Korn Ferry on January 24, 2024 and sell it today you would earn a total of 893.00 from holding Korn Ferry or generate 16.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Automatic Data Processing vs. Korn Ferry
Performance |
| Timeline |
| Automatic Data Processing |
| Korn Ferry |
Automatic Data and Korn Ferry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Automatic Data and Korn Ferry
The main advantage of trading using opposite Automatic Data and Korn Ferry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automatic Data position performs unexpectedly, Korn Ferry 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 Korn Ferry will offset losses from the drop in Korn Ferry's long position.| Automatic Data vs. Discount Print USA | Automatic Data vs. Cass Information Systems | Automatic Data vs. Maximus | Automatic Data vs. AZZ Incorporated |
| Korn Ferry vs. Discount Print USA | Korn Ferry vs. Cass Information Systems | Korn Ferry vs. Maximus | Korn Ferry vs. AZZ Incorporated |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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