Correlation Between EHealth and Kingstone Companies
Can any of the company-specific risk be diversified away by investing in both EHealth and Kingstone Companies 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 EHealth and Kingstone Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between eHealth and Kingstone Companies, you can compare the effects of market volatilities on EHealth and Kingstone Companies 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 EHealth with a short position of Kingstone Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of EHealth and Kingstone Companies.
Diversification Opportunities for EHealth and Kingstone Companies
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between EHealth and Kingstone is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding eHealth and Kingstone Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingstone Companies and EHealth 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 eHealth are associated (or correlated) with Kingstone Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingstone Companies has no effect on the direction of EHealth i.e., EHealth and Kingstone Companies go up and down completely randomly.
Pair Corralation between EHealth and Kingstone Companies
Given the investment horizon of 90 days eHealth is expected to under-perform the Kingstone Companies. But the stock apears to be less risky and, when comparing its historical volatility, eHealth is 1.09 times less risky than Kingstone Companies. The stock trades about -0.07 of its potential returns per unit of risk. The Kingstone Companies is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 194.00 in Kingstone Companies on January 25, 2024 and sell it today you would earn a total of 226.00 from holding Kingstone Companies or generate 116.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
eHealth vs. Kingstone Companies
Performance |
| Timeline |
| eHealth |
| Kingstone Companies |
EHealth and Kingstone Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EHealth and Kingstone Companies
The main advantage of trading using opposite EHealth and Kingstone Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EHealth position performs unexpectedly, Kingstone Companies 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 Kingstone Companies will offset losses from the drop in Kingstone Companies' long position.| EHealth vs. GoHealth | EHealth vs. Tian Ruixiang Holdings | EHealth vs. Huize HoldingLtd | EHealth vs. Fanhua Inc |
| Kingstone Companies vs. HCI Group | Kingstone Companies vs. Universal Insurance Holdings | Kingstone Companies vs. Horace Mann Educators | Kingstone Companies vs. Heritage Insurance Hldgs |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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