Correlation Between Kingstone Companies and Unico American
Can any of the company-specific risk be diversified away by investing in both Kingstone Companies and Unico American 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 Kingstone Companies and Unico American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kingstone Companies and Unico American, you can compare the effects of market volatilities on Kingstone Companies and Unico American 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 Kingstone Companies with a short position of Unico American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingstone Companies and Unico American.
Diversification Opportunities for Kingstone Companies and Unico American
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kingstone and Unico is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Kingstone Companies and Unico American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unico American and Kingstone Companies 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 Kingstone Companies are associated (or correlated) with Unico American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unico American has no effect on the direction of Kingstone Companies i.e., Kingstone Companies and Unico American go up and down completely randomly.
Pair Corralation between Kingstone Companies and Unico American
Given the investment horizon of 90 days Kingstone Companies is expected to generate 2.76 times more return on investment than Unico American. However, Kingstone Companies is 2.76 times more volatile than Unico American. It trades about 0.45 of its potential returns per unit of risk. Unico American is currently generating about 0.21 per unit of risk. If you would invest 973.00 in Kingstone Companies on August 29, 2024 and sell it today you would earn a total of 623.00 from holding Kingstone Companies or generate 64.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingstone Companies vs. Unico American
Performance |
| Timeline |
| Kingstone Companies |
| Unico American |
Kingstone Companies and Unico American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingstone Companies and Unico American
The main advantage of trading using opposite Kingstone Companies and Unico American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingstone Companies position performs unexpectedly, Unico American 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 Unico American will offset losses from the drop in Unico American's long position.| Kingstone Companies vs. HCI Group | Kingstone Companies vs. Universal Insurance Holdings | Kingstone Companies vs. Horace Mann Educators | Kingstone Companies vs. Heritage Insurance Hldgs |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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