Correlation Between Aeye and Kinsale Capital
Can any of the company-specific risk be diversified away by investing in both Aeye and Kinsale Capital 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 Aeye and Kinsale Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeye Inc and Kinsale Capital Group, you can compare the effects of market volatilities on Aeye and Kinsale Capital 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 Aeye with a short position of Kinsale Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeye and Kinsale Capital.
Diversification Opportunities for Aeye and Kinsale Capital
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aeye and Kinsale is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Aeye Inc and Kinsale Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinsale Capital Group and Aeye 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 Aeye Inc are associated (or correlated) with Kinsale Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinsale Capital Group has no effect on the direction of Aeye i.e., Aeye and Kinsale Capital go up and down completely randomly.
Pair Corralation between Aeye and Kinsale Capital
Given the investment horizon of 90 days Aeye is expected to generate 3.73 times less return on investment than Kinsale Capital. In addition to that, Aeye is 3.25 times more volatile than Kinsale Capital Group. It trades about 0.01 of its total potential returns per unit of risk. Kinsale Capital Group is currently generating about 0.18 per unit of volatility. If you would invest 47,182 in Kinsale Capital Group on September 13, 2024 and sell it today you would earn a total of 3,126 from holding Kinsale Capital Group or generate 6.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Aeye Inc vs. Kinsale Capital Group
Performance |
| Timeline |
| Aeye Inc |
| Kinsale Capital Group |
Aeye and Kinsale Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeye and Kinsale Capital
The main advantage of trading using opposite Aeye and Kinsale Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeye position performs unexpectedly, Kinsale Capital 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 Kinsale Capital will offset losses from the drop in Kinsale Capital's long position.| Aeye vs. Innoviz Technologies | Aeye vs. Luminar Technologies | Aeye vs. Aeva Technologies | Aeye vs. Quantumscape Corp |
| 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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