Correlation Between Kingsway Financial and AutoZone
Can any of the company-specific risk be diversified away by investing in both Kingsway Financial and AutoZone 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 Kingsway Financial and AutoZone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kingsway Financial Services and AutoZone, you can compare the effects of market volatilities on Kingsway Financial and AutoZone 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 Kingsway Financial with a short position of AutoZone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingsway Financial and AutoZone.
Diversification Opportunities for Kingsway Financial and AutoZone
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kingsway and AutoZone is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Kingsway Financial Services and AutoZone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AutoZone and Kingsway Financial 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 Kingsway Financial Services are associated (or correlated) with AutoZone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AutoZone has no effect on the direction of Kingsway Financial i.e., Kingsway Financial and AutoZone go up and down completely randomly.
Pair Corralation between Kingsway Financial and AutoZone
Considering the 90-day investment horizon Kingsway Financial Services is expected to under-perform the AutoZone. In addition to that, Kingsway Financial is 1.31 times more volatile than AutoZone. It trades about -0.02 of its total potential returns per unit of risk. AutoZone is currently generating about 0.16 per unit of volatility. If you would invest 300,900 in AutoZone on September 1, 2024 and sell it today you would earn a total of 16,054 from holding AutoZone or generate 5.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingsway Financial Services vs. AutoZone
Performance |
| Timeline |
| Kingsway Financial |
| AutoZone |
Kingsway Financial and AutoZone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingsway Financial and AutoZone
The main advantage of trading using opposite Kingsway Financial and AutoZone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingsway Financial position performs unexpectedly, AutoZone 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 AutoZone will offset losses from the drop in AutoZone's long position.| Kingsway Financial vs. CarGurus | Kingsway Financial vs. KAR Auction Services | Kingsway Financial vs. Driven Brands Holdings | Kingsway Financial vs. Group 1 Automotive |
| AutoZone vs. Advance Auto Parts | AutoZone vs. Tractor Supply | AutoZone vs. Genuine Parts Co | AutoZone vs. Five Below |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |