Correlation Between Ambipar Emergency and Kforce

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

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

Diversification Opportunities for Ambipar Emergency and Kforce

-0.76

Correlation Coefficient

Ambipar Emergency  Kforce

Pay attention - limited upside

The 3 months correlation between Ambipar and Kforce is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Ambipar Emergency Response and Kforce Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kforce Inc and Ambipar Emergency 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 Ambipar Emergency Response 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 Ambipar Emergency i.e., Ambipar Emergency and Kforce go up and down completely randomly.

Pair Corralation between Ambipar Emergency and Kforce

Given the investment horizon of 90 days Ambipar Emergency Response is expected to generate 3.19 times more return on investment than Kforce. However, Ambipar Emergency is 3.19 times more volatile than Kforce Inc. It trades about 0.1 of its potential returns per unit of risk. Kforce Inc is currently generating about -0.05 per unit of risk. If you would invest  411.00  in Ambipar Emergency Response on September 1, 2024 and sell it today you would earn a total of  123.00  from holding Ambipar Emergency Response or generate 29.93% return on investment over 90 days.

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

Ambipar Emergency Response  vs.  Kforce Inc

Ambipar Emergency

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ambipar Emergency Response are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile fundamental drivers, Ambipar Emergency demonstrated solid returns over the last few months and may actually be approaching a breakup point.

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 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 Ambipar Emergency and Kforce

The main advantage of trading using opposite Ambipar Emergency and Kforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambipar Emergency 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 Ambipar Emergency Response 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.