Correlation Between Kingsway Financial and Vroom
Can any of the company-specific risk be diversified away by investing in both Kingsway Financial and Vroom 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 Vroom 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 Vroom Inc, you can compare the effects of market volatilities on Kingsway Financial and Vroom 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 Vroom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingsway Financial and Vroom.
Diversification Opportunities for Kingsway Financial and Vroom
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kingsway and Vroom is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Kingsway Financial Services and Vroom Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vroom Inc 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 Vroom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vroom Inc has no effect on the direction of Kingsway Financial i.e., Kingsway Financial and Vroom go up and down completely randomly.
Pair Corralation between Kingsway Financial and Vroom
Considering the 90-day investment horizon Kingsway Financial Services is expected to under-perform the Vroom. But the stock apears to be less risky and, when comparing its historical volatility, Kingsway Financial Services is 3.89 times less risky than Vroom. The stock trades about -0.05 of its potential returns per unit of risk. The Vroom Inc is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 520.00 in Vroom Inc on November 1, 2024 and sell it today you would earn a total of 80.00 from holding Vroom Inc or generate 15.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingsway Financial Services vs. Vroom Inc
Performance |
| Timeline |
| Kingsway Financial |
| Vroom Inc |
Kingsway Financial and Vroom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingsway Financial and Vroom
The main advantage of trading using opposite Kingsway Financial and Vroom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingsway Financial position performs unexpectedly, Vroom 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 Vroom will offset losses from the drop in Vroom'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 |
| Vroom vs. CarMax Inc | Vroom vs. SunCar Technology Group | Vroom vs. U Power Limited | Vroom vs. Camping World Holdings |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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