Correlation Between Kingsway Financial and ChargePoint Holdings
Can any of the company-specific risk be diversified away by investing in both Kingsway Financial and ChargePoint Holdings 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 ChargePoint Holdings 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 ChargePoint Holdings, you can compare the effects of market volatilities on Kingsway Financial and ChargePoint Holdings 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 ChargePoint Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingsway Financial and ChargePoint Holdings.
Diversification Opportunities for Kingsway Financial and ChargePoint Holdings
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kingsway and ChargePoint is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Kingsway Financial Services and ChargePoint Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChargePoint Holdings 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 ChargePoint Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChargePoint Holdings has no effect on the direction of Kingsway Financial i.e., Kingsway Financial and ChargePoint Holdings go up and down completely randomly.
Pair Corralation between Kingsway Financial and ChargePoint Holdings
Considering the 90-day investment horizon Kingsway Financial Services is expected to under-perform the ChargePoint Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Kingsway Financial Services is 2.42 times less risky than ChargePoint Holdings. The stock trades about -0.08 of its potential returns per unit of risk. The ChargePoint Holdings is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 128.00 in ChargePoint Holdings on August 27, 2024 and sell it today you would lose (3.00) from holding ChargePoint Holdings or give up 2.34% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Kingsway Financial Services vs. ChargePoint Holdings
Performance |
Timeline |
Kingsway Financial |
ChargePoint Holdings |
Kingsway Financial and ChargePoint Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kingsway Financial and ChargePoint Holdings
The main advantage of trading using opposite Kingsway Financial and ChargePoint Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingsway Financial position performs unexpectedly, ChargePoint Holdings 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 ChargePoint Holdings will offset losses from the drop in ChargePoint Holdings' long position.Kingsway Financial vs. CarGurus | Kingsway Financial vs. KAR Auction Services | Kingsway Financial vs. Driven Brands Holdings | Kingsway Financial vs. Group 1 Automotive |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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