Correlation Between Group 1 and Kingsway Financial
Can any of the company-specific risk be diversified away by investing in both Group 1 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 Group 1 and Kingsway Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Group 1 Automotive and Kingsway Financial Services, you can compare the effects of market volatilities on Group 1 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 Group 1 with a short position of Kingsway Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Group 1 and Kingsway Financial.
Diversification Opportunities for Group 1 and Kingsway Financial
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Group and Kingsway is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Group 1 Automotive and Kingsway Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingsway Financial and Group 1 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 Group 1 Automotive 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 Group 1 i.e., Group 1 and Kingsway Financial go up and down completely randomly.
Pair Corralation between Group 1 and Kingsway Financial
Considering the 90-day investment horizon Group 1 Automotive is expected to generate 1.03 times more return on investment than Kingsway Financial. However, Group 1 is 1.03 times more volatile than Kingsway Financial Services. It trades about 0.09 of its potential returns per unit of risk. Kingsway Financial Services is currently generating about 0.03 per unit of risk. If you would invest 18,671 in Group 1 Automotive on August 24, 2024 and sell it today you would earn a total of 23,443 from holding Group 1 Automotive or generate 125.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Group 1 Automotive vs. Kingsway Financial Services
Performance |
| Timeline |
| Group 1 Automotive |
| Kingsway Financial |
Group 1 and Kingsway Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Group 1 and Kingsway Financial
The main advantage of trading using opposite Group 1 and Kingsway Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Group 1 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.| Group 1 vs. Penske Automotive Group | Group 1 vs. Lithia Motors | Group 1 vs. AutoNation | Group 1 vs. Asbury Automotive Group |
| Kingsway Financial vs. CarGurus | Kingsway Financial vs. KAR Auction Services | Kingsway Financial vs. Driven Brands Holdings | Kingsway Financial vs. Group 1 Automotive |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |