Correlation Between Korn Ferry and DLH Holdings

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

By analyzing existing cross correlation between Korn Ferry and DLH Holdings Corp, you can compare the effects of market volatilities on Korn Ferry and DLH Holdings 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 Korn Ferry with a short position of DLH Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korn Ferry and DLH Holdings.

Diversification Opportunities for Korn Ferry and DLH Holdings

0.48

Correlation Coefficient

Korn Ferry  DLH Holdings

Very weak diversification

The 3 months correlation between Korn and DLH is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Korn Ferry and DLH Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DLH Holdings Corp and Korn Ferry 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 Korn Ferry are associated (or correlated) with DLH Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DLH Holdings Corp has no effect on the direction of Korn Ferry i.e., Korn Ferry and DLH Holdings go up and down completely randomly.

Pair Corralation between Korn Ferry and DLH Holdings

Considering the 90-day investment horizon Korn Ferry is expected to under-perform the DLH Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Korn Ferry is 1.17 times less risky than DLH Holdings. The stock trades about -0.35 of its potential returns per unit of risk. The DLH Holdings Corp is currently generating about -0.24 of returns per unit of risk over similar time horizon. If you would invest  873.00  in DLH Holdings Corp on September 26, 2024 and sell it today you would lose (105.00) from holding DLH Holdings Corp or give up 12.03% of portfolio value over 90 days.

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

Korn Ferry  vs.  DLH Holdings Corp

Korn Ferry

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Korn Ferry has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Korn Ferry is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

DLH Holdings Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DLH Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Korn Ferry and DLH Holdings

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

The idea behind Korn Ferry and DLH Holdings Corp 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.