Correlation Between Adyen NV and Kinsale Capital
Can any of the company-specific risk be diversified away by investing in both Adyen NV and Kinsale Capital 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 Adyen NV and Kinsale Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adyen NV and Kinsale Capital Group, you can compare the effects of market volatilities on Adyen NV and Kinsale Capital 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 Adyen NV with a short position of Kinsale Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adyen NV and Kinsale Capital.
Diversification Opportunities for Adyen NV and Kinsale Capital
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Adyen and Kinsale is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Adyen NV and Kinsale Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinsale Capital Group and Adyen NV 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 Adyen NV are associated (or correlated) with Kinsale Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinsale Capital Group has no effect on the direction of Adyen NV i.e., Adyen NV and Kinsale Capital go up and down completely randomly.
Pair Corralation between Adyen NV and Kinsale Capital
Assuming the 90 days horizon Adyen NV is expected to generate 2.09 times less return on investment than Kinsale Capital. In addition to that, Adyen NV is 1.02 times more volatile than Kinsale Capital Group. It trades about 0.05 of its total potential returns per unit of risk. Kinsale Capital Group is currently generating about 0.11 per unit of volatility. If you would invest 38,038 in Kinsale Capital Group on September 2, 2024 and sell it today you would earn a total of 12,806 from holding Kinsale Capital Group or generate 33.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adyen NV vs. Kinsale Capital Group
Performance |
| Timeline |
| Adyen NV |
| Kinsale Capital Group |
Adyen NV and Kinsale Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adyen NV and Kinsale Capital
The main advantage of trading using opposite Adyen NV and Kinsale Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adyen NV position performs unexpectedly, Kinsale Capital 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 Kinsale Capital will offset losses from the drop in Kinsale Capital's long position.The idea behind Adyen NV and Kinsale Capital 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.| Kinsale Capital vs. Selective Insurance Group | Kinsale Capital vs. Horace Mann Educators | Kinsale Capital vs. Kemper | Kinsale Capital vs. ProAssurance |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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