Correlation Between TriNet and Kforce

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

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

Diversification Opportunities for TriNet and Kforce

0.36

Correlation Coefficient

TriNet  Kforce

Weak diversification

The 3 months correlation between TriNet and Kforce is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding TriNet Group and Kforce Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kforce Inc and TriNet 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 TriNet Group 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 TriNet i.e., TriNet and Kforce go up and down completely randomly.

Pair Corralation between TriNet and Kforce

Given the investment horizon of 90 days TriNet Group is expected to generate 1.52 times more return on investment than Kforce. However, TriNet is 1.52 times more volatile than Kforce Inc. It trades about 0.02 of its potential returns per unit of risk. Kforce Inc is currently generating about -0.02 per unit of risk. If you would invest  9,407  in TriNet Group on September 10, 2024 and sell it today you would earn a total of  62.00  from holding TriNet Group or generate 0.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

TriNet Group  vs.  Kforce Inc

TriNet Group

Risk-Adjusted Performance

1 of 100

Weak

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

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 current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with TriNet and Kforce

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

Check out your portfolio center.

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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.