Correlation Between Kinsale Capital and Lotus Technology
Can any of the company-specific risk be diversified away by investing in both Kinsale Capital and Lotus Technology 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 Lotus Technology 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 Lotus Technology Warrants, you can compare the effects of market volatilities on Kinsale Capital and Lotus Technology 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 Lotus Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinsale Capital and Lotus Technology.
Diversification Opportunities for Kinsale Capital and Lotus Technology
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Kinsale and Lotus is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Kinsale Capital Group and Lotus Technology Warrants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Technology Warrants 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 Lotus Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Technology Warrants has no effect on the direction of Kinsale Capital i.e., Kinsale Capital and Lotus Technology go up and down completely randomly.
Pair Corralation between Kinsale Capital and Lotus Technology
Given the investment horizon of 90 days Kinsale Capital Group is expected to generate 0.24 times more return on investment than Lotus Technology. However, Kinsale Capital Group is 4.14 times less risky than Lotus Technology. It trades about 0.11 of its potential returns per unit of risk. Lotus Technology Warrants is currently generating about 0.01 per unit of risk. If you would invest 46,138 in Kinsale Capital Group on August 28, 2024 and sell it today you would earn a total of 4,494 from holding Kinsale Capital Group or generate 9.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 64.29% |
| Values | Daily Returns |
Kinsale Capital Group vs. Lotus Technology Warrants
Performance |
| Timeline |
| Kinsale Capital Group |
| Lotus Technology Warrants |
Kinsale Capital and Lotus Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kinsale Capital and Lotus Technology
The main advantage of trading using opposite Kinsale Capital and Lotus Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinsale Capital position performs unexpectedly, Lotus Technology 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 Lotus Technology will offset losses from the drop in Lotus Technology's long position.| Kinsale Capital vs. Selective Insurance Group | Kinsale Capital vs. Horace Mann Educators | Kinsale Capital vs. Kemper | Kinsale Capital vs. ProAssurance |
| Lotus Technology vs. F PD | Lotus Technology vs. China Yuchai International | Lotus Technology vs. Canoo 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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