Correlation Between Kinsale Capital and Donegal Group
Can any of the company-specific risk be diversified away by investing in both Kinsale Capital and Donegal Group 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 Kinsale Capital and Donegal Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kinsale Capital Group and Donegal Group B, you can compare the effects of market volatilities on Kinsale Capital and Donegal Group 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 Kinsale Capital with a short position of Donegal Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinsale Capital and Donegal Group.
Diversification Opportunities for Kinsale Capital and Donegal Group
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kinsale and Donegal is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Kinsale Capital Group and Donegal Group B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Donegal Group B and Kinsale Capital 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 Kinsale Capital Group are associated (or correlated) with Donegal Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Donegal Group B has no effect on the direction of Kinsale Capital i.e., Kinsale Capital and Donegal Group go up and down completely randomly.
Pair Corralation between Kinsale Capital and Donegal Group
Given the investment horizon of 90 days Kinsale Capital Group is expected to generate 0.73 times more return on investment than Donegal Group. However, Kinsale Capital Group is 1.37 times less risky than Donegal Group. It trades about 0.05 of its potential returns per unit of risk. Donegal Group B is currently generating about 0.02 per unit of risk. If you would invest 36,782 in Kinsale Capital Group on August 28, 2024 and sell it today you would earn a total of 13,850 from holding Kinsale Capital Group or generate 37.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 79.66% |
| Values | Daily Returns |
Kinsale Capital Group vs. Donegal Group B
Performance |
| Timeline |
| Kinsale Capital Group |
| Donegal Group B |
Kinsale Capital and Donegal Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinsale Capital and Donegal Group
The main advantage of trading using opposite Kinsale Capital and Donegal Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinsale Capital position performs unexpectedly, Donegal Group 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 Donegal Group will offset losses from the drop in Donegal Group's long position.| Kinsale Capital vs. Selective Insurance Group | Kinsale Capital vs. Horace Mann Educators | Kinsale Capital vs. Kemper | Kinsale Capital vs. ProAssurance |
| Donegal Group vs. Horace Mann Educators | Donegal Group vs. United Fire Group | Donegal Group vs. Donegal Group A | Donegal Group vs. Global Indemnity PLC |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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