Correlation Between Verisk Analytics and Kforce

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

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

Diversification Opportunities for Verisk Analytics and Kforce

0.35

Correlation Coefficient

Verisk Analytics  Kforce

Weak diversification

The 3 months correlation between Verisk and Kforce is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Verisk Analytics and Kforce Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kforce Inc and Verisk Analytics 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 Verisk Analytics 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 Verisk Analytics i.e., Verisk Analytics and Kforce go up and down completely randomly.

Pair Corralation between Verisk Analytics and Kforce

Given the investment horizon of 90 days Verisk Analytics is expected to under-perform the Kforce. But the stock apears to be less risky and, when comparing its historical volatility, Verisk Analytics is 2.2 times less risky than Kforce. The stock trades about -0.08 of its potential returns per unit of risk. The Kforce Inc is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  3,725  in Kforce Inc on May 4, 2025 and sell it today you would lose (301.00) from holding Kforce Inc or give up 8.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Verisk Analytics  vs.  Kforce Inc

Verisk Analytics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Verisk Analytics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Kforce Inc

Risk-Adjusted Performance

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 rather sound basic indicators, Kforce is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Verisk Analytics and Kforce

The main advantage of trading using opposite Verisk Analytics and Kforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verisk Analytics 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 Verisk Analytics 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.