Correlation Between AutoNation and Kingsway Financial
Can any of the company-specific risk be diversified away by investing in both AutoNation and Kingsway Financial 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 AutoNation and Kingsway Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AutoNation and Kingsway Financial Services, you can compare the effects of market volatilities on AutoNation and Kingsway Financial 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 AutoNation with a short position of Kingsway Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of AutoNation and Kingsway Financial.
Diversification Opportunities for AutoNation and Kingsway Financial
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AutoNation and Kingsway is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding AutoNation and Kingsway Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingsway Financial and AutoNation 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 AutoNation are associated (or correlated) with Kingsway Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingsway Financial has no effect on the direction of AutoNation i.e., AutoNation and Kingsway Financial go up and down completely randomly.
Pair Corralation between AutoNation and Kingsway Financial
If you would invest 15,803 in AutoNation on August 28, 2024 and sell it today you would earn a total of 2,155 from holding AutoNation or generate 13.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
AutoNation vs. Kingsway Financial Services
Performance |
| Timeline |
| AutoNation |
| Kingsway Financial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
AutoNation and Kingsway Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AutoNation and Kingsway Financial
The main advantage of trading using opposite AutoNation and Kingsway Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AutoNation position performs unexpectedly, Kingsway Financial 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 Kingsway Financial will offset losses from the drop in Kingsway Financial's long position.| AutoNation vs. Kingsway Financial Services | AutoNation vs. KAR Auction Services | AutoNation vs. Cango Inc | AutoNation vs. Vroom Inc |
| Kingsway Financial vs. Cars Inc | Kingsway Financial vs. KAR Auction Services | Kingsway Financial vs. Rush Enterprises B | Kingsway Financial vs. Rush Enterprises A |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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