Correlation Between Kelly Services and DHI

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

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

Diversification Opportunities for Kelly Services and DHI

0.49

Correlation Coefficient

Kelly Services  DHI

Very weak diversification

The 3 months correlation between Kelly and DHI is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Kelly Services A and DHI Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DHI Group 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 A are associated (or correlated) with DHI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DHI Group has no effect on the direction of Kelly Services i.e., Kelly Services and DHI go up and down completely randomly.

Pair Corralation between Kelly Services and DHI

Assuming the 90 days horizon Kelly Services A is expected to generate 0.34 times more return on investment than DHI. However, Kelly Services A is 2.91 times less risky than DHI. It trades about -0.14 of its potential returns per unit of risk. DHI Group is currently generating about -0.14 per unit of risk. If you would invest  2,448  in Kelly Services A on January 24, 2024 and sell it today you would lose (90.00) from holding Kelly Services A or give up 3.68% of portfolio value over 90 days.

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

Kelly Services A  vs.  DHI Group

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 inconsistent basic indicators, Kelly Services sustained solid returns over the last few months and may actually be approaching a breakup point.

DHI Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in DHI Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical indicators, DHI is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kelly Services and DHI

The main advantage of trading using opposite Kelly Services and DHI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kelly Services position performs unexpectedly, DHI 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 DHI will offset losses from the drop in DHI's long position.

The idea behind Kelly Services A and DHI Group 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.