Correlation Between Kaixin Auto and Kingsway Financial
Can any of the company-specific risk be diversified away by investing in both Kaixin Auto and Kingsway Financial 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 Kaixin Auto and Kingsway Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaixin Auto Holdings and Kingsway Financial Services, you can compare the effects of market volatilities on Kaixin Auto and Kingsway Financial 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 Kaixin Auto with a short position of Kingsway Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaixin Auto and Kingsway Financial.
Diversification Opportunities for Kaixin Auto and Kingsway Financial
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kaixin and Kingsway is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Kaixin Auto Holdings and Kingsway Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingsway Financial and Kaixin Auto 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 Kaixin Auto Holdings are associated (or correlated) with Kingsway Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingsway Financial has no effect on the direction of Kaixin Auto i.e., Kaixin Auto and Kingsway Financial go up and down completely randomly.
Pair Corralation between Kaixin Auto and Kingsway Financial
Given the investment horizon of 90 days Kaixin Auto Holdings is expected to under-perform the Kingsway Financial. In addition to that, Kaixin Auto is 7.98 times more volatile than Kingsway Financial Services. It trades about -0.03 of its total potential returns per unit of risk. Kingsway Financial Services is currently generating about 0.01 per unit of volatility. If you would invest 866.00 in Kingsway Financial Services on August 24, 2024 and sell it today you would earn a total of 32.00 from holding Kingsway Financial Services or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kaixin Auto Holdings vs. Kingsway Financial Services
Performance |
| Timeline |
| Kaixin Auto Holdings |
| Kingsway Financial |
Kaixin Auto and Kingsway Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaixin Auto and Kingsway Financial
The main advantage of trading using opposite Kaixin Auto and Kingsway Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaixin Auto position performs unexpectedly, Kingsway Financial 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 Kingsway Financial will offset losses from the drop in Kingsway Financial's long position.| Kaixin Auto vs. Vroom Inc | Kaixin Auto vs. Cango Inc | Kaixin Auto vs. Cars Inc | Kaixin Auto vs. KAR Auction Services |
| Kingsway Financial vs. CarGurus | Kingsway Financial vs. KAR Auction Services | Kingsway Financial vs. Driven Brands Holdings | Kingsway Financial vs. Group 1 Automotive |
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..
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |