Correlation Between Rush Enterprises and Kingsway Financial
Can any of the company-specific risk be diversified away by investing in both Rush Enterprises 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 Rush Enterprises and Kingsway Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rush Enterprises B and Kingsway Financial Services, you can compare the effects of market volatilities on Rush Enterprises 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 Rush Enterprises with a short position of Kingsway Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rush Enterprises and Kingsway Financial.
Diversification Opportunities for Rush Enterprises and Kingsway Financial
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rush and Kingsway is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Rush Enterprises B and Kingsway Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingsway Financial and Rush Enterprises 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 Rush Enterprises B 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 Rush Enterprises i.e., Rush Enterprises and Kingsway Financial go up and down completely randomly.
Pair Corralation between Rush Enterprises and Kingsway Financial
Assuming the 90 days horizon Rush Enterprises B is expected to generate 1.21 times more return on investment than Kingsway Financial. However, Rush Enterprises is 1.21 times more volatile than Kingsway Financial Services. It trades about 0.18 of its potential returns per unit of risk. Kingsway Financial Services is currently generating about 0.05 per unit of risk. If you would invest 5,450 in Rush Enterprises B on November 5, 2024 and sell it today you would earn a total of 282.00 from holding Rush Enterprises B or generate 5.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rush Enterprises B vs. Kingsway Financial Services
Performance |
| Timeline |
| Rush Enterprises B |
| Kingsway Financial |
Rush Enterprises and Kingsway Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rush Enterprises and Kingsway Financial
The main advantage of trading using opposite Rush Enterprises and Kingsway Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rush Enterprises 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.| Rush Enterprises vs. Sonic Automotive | Rush Enterprises vs. KAR Auction Services | Rush Enterprises vs. Kingsway Financial Services | Rush Enterprises vs. Asbury Automotive Group |
| 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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