Correlation Between Kingsway Financial and U Power
Can any of the company-specific risk be diversified away by investing in both Kingsway Financial and U Power 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 U Power 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 U Power Limited, you can compare the effects of market volatilities on Kingsway Financial and U Power 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 U Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingsway Financial and U Power.
Diversification Opportunities for Kingsway Financial and U Power
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kingsway and UCAR is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Kingsway Financial Services and U Power Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Power Limited 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 U Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Power Limited has no effect on the direction of Kingsway Financial i.e., Kingsway Financial and U Power go up and down completely randomly.
Pair Corralation between Kingsway Financial and U Power
Considering the 90-day investment horizon Kingsway Financial is expected to generate 90.49 times less return on investment than U Power. But when comparing it to its historical volatility, Kingsway Financial Services is 27.86 times less risky than U Power. It trades about 0.01 of its potential returns per unit of risk. U Power Limited is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 79,000 in U Power Limited on August 31, 2024 and sell it today you would lose (78,368) from holding U Power Limited or give up 99.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingsway Financial Services vs. U Power Limited
Performance |
| Timeline |
| Kingsway Financial |
| U Power Limited |
Kingsway Financial and U Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingsway Financial and U Power
The main advantage of trading using opposite Kingsway Financial and U Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingsway Financial position performs unexpectedly, U Power 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 U Power will offset losses from the drop in U Power'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 |
| U Power vs. Kaixin Auto Holdings | U Power vs. Uxin | U Power vs. SunCar Technology Group | U Power vs. Carvana Co |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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