Correlation Between Kelly Services and Kelly Services

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

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

Diversification Opportunities for Kelly Services and Kelly Services

0.27

Correlation Coefficient

Kelly Services  Kelly Services

Modest diversification

The 3 months correlation between Kelly and Kelly is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Kelly Services B 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 Kelly Services 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 Kelly Services B 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 Kelly Services i.e., Kelly Services and Kelly Services go up and down completely randomly.

Pair Corralation between Kelly Services and Kelly Services

Assuming the 90 days horizon Kelly Services B is expected to under-perform the Kelly Services. In addition to that, Kelly Services is 1.37 times more volatile than Kelly Services A. It trades about -0.45 of its total potential returns per unit of risk. Kelly Services A is currently generating about -0.2 per unit of volatility. If you would invest  2,441  in Kelly Services A on January 31, 2024 and sell it today you would lose (147.00) from holding Kelly Services A or give up 6.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	22.73%
Values	Daily Returns

Kelly Services B  vs.  Kelly Services A

Kelly Services B

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Kelly Services B has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat inconsistent basic indicators, Kelly Services sustained solid returns over the last few months and may actually be approaching a breakup point.

Kelly Services A

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kelly Services A are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Kelly Services sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kelly Services and Kelly Services

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

The idea behind Kelly Services B and Kelly Services A 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.