Correlation Between Visa and Kingsway Financial
Can any of the company-specific risk be diversified away by investing in both Visa 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 Visa and Kingsway Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Kingsway Financial Services, you can compare the effects of market volatilities on Visa 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 Visa with a short position of Kingsway Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Kingsway Financial.
Diversification Opportunities for Visa and Kingsway Financial
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Visa and Kingsway is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Kingsway Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingsway Financial and Visa 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 Visa Class A 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 Visa i.e., Visa and Kingsway Financial go up and down completely randomly.
Pair Corralation between Visa and Kingsway Financial
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.73 times more return on investment than Kingsway Financial. However, Visa Class A is 1.36 times less risky than Kingsway Financial. It trades about 0.49 of its potential returns per unit of risk. Kingsway Financial Services is currently generating about 0.03 per unit of risk. If you would invest 31,440 in Visa Class A on November 2, 2024 and sell it today you would earn a total of 2,865 from holding Visa Class A or generate 9.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. Kingsway Financial Services
Performance |
| Timeline |
| Visa Class A |
| Kingsway Financial |
Visa and Kingsway Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Kingsway Financial
The main advantage of trading using opposite Visa and Kingsway Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart Holdings |
| 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..
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