Correlation Between Kinsale Capital and Dlocal
Can any of the company-specific risk be diversified away by investing in both Kinsale Capital and Dlocal 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 Dlocal 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 Dlocal, you can compare the effects of market volatilities on Kinsale Capital and Dlocal 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 Dlocal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinsale Capital and Dlocal.
Diversification Opportunities for Kinsale Capital and Dlocal
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kinsale and Dlocal is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Kinsale Capital Group and Dlocal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dlocal 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 Dlocal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dlocal has no effect on the direction of Kinsale Capital i.e., Kinsale Capital and Dlocal go up and down completely randomly.
Pair Corralation between Kinsale Capital and Dlocal
Given the investment horizon of 90 days Kinsale Capital is expected to generate 1.63 times less return on investment than Dlocal. But when comparing it to its historical volatility, Kinsale Capital Group is 2.34 times less risky than Dlocal. It trades about 0.37 of its potential returns per unit of risk. Dlocal is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 909.00 in Dlocal on August 28, 2024 and sell it today you would earn a total of 226.00 from holding Dlocal or generate 24.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kinsale Capital Group vs. Dlocal
Performance |
| Timeline |
| Kinsale Capital Group |
| Dlocal |
Kinsale Capital and Dlocal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinsale Capital and Dlocal
The main advantage of trading using opposite Kinsale Capital and Dlocal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinsale Capital position performs unexpectedly, Dlocal 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 Dlocal will offset losses from the drop in Dlocal's long position.| Kinsale Capital vs. Selective Insurance Group | Kinsale Capital vs. Horace Mann Educators | Kinsale Capital vs. Kemper | Kinsale Capital vs. ProAssurance |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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