Correlation Between Kingsway Financial and China Auto

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Can any of the company-specific risk be diversified away by investing in both Kingsway Financial and China Auto 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 Kingsway Financial and China Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kingsway Financial Services and China Auto Logistics, you can compare the effects of market volatilities on Kingsway Financial and China Auto 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 Kingsway Financial with a short position of China Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingsway Financial and China Auto.

Diversification Opportunities for Kingsway Financial and China Auto

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Kingsway and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kingsway Financial Services and China Auto Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Auto Logistics and Kingsway Financial 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 Kingsway Financial Services are associated (or correlated) with China Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Auto Logistics has no effect on the direction of Kingsway Financial i.e., Kingsway Financial and China Auto go up and down completely randomly.

Pair Corralation between Kingsway Financial and China Auto

If you would invest (100.00) in China Auto Logistics on December 30, 2023 and sell it today you would earn a total of  100.00  from holding China Auto Logistics or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Kingsway Financial Services  vs.  China Auto Logistics

 Performance 
       Timeline  
Kingsway Financial 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Kingsway Financial Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Kingsway Financial is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.
China Auto Logistics 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days China Auto Logistics has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong essential indicators, China Auto is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Kingsway Financial and China Auto Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kingsway Financial and China Auto

The main advantage of trading using opposite Kingsway Financial and China Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingsway Financial position performs unexpectedly, China Auto 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 China Auto will offset losses from the drop in China Auto's long position.
The idea behind Kingsway Financial Services and China Auto Logistics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.

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