Correlation Between Kinsale Capital and Adaptive Medias

Can any of the company-specific risk be diversified away by investing in both Kinsale Capital and Adaptive Medias 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 Kinsale Capital and Adaptive Medias into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kinsale Capital Group and Adaptive Medias, you can compare the effects of market volatilities on Kinsale Capital and Adaptive Medias 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 Kinsale Capital with a short position of Adaptive Medias. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kinsale Capital and Adaptive Medias.

Diversification Opportunities for Kinsale Capital and Adaptive Medias

Good diversification

The 3 months correlation between Kinsale and Adaptive is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Kinsale Capital Group and Adaptive Medias in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adaptive Medias and Kinsale Capital 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 Kinsale Capital Group are associated (or correlated) with Adaptive Medias. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adaptive Medias has no effect on the direction of Kinsale Capital i.e., Kinsale Capital and Adaptive Medias go up and down completely randomly.

Pair Corralation between Kinsale Capital and Adaptive Medias

If you would invest  34,037  in Kinsale Capital Group on September 7, 2023 and sell it today you would earn a total of  117.00  from holding Kinsale Capital Group or generate 0.34% return on investment over 90 days.

Kinsale Capital Group  vs.  Adaptive Medias

Kinsale Capital Group

Kinsale Performance

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Over the last 90 days Kinsale Capital Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in January 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Adaptive Medias

Adaptive Performance

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Over the last 90 days Adaptive Medias has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Adaptive Medias is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the insiders.

Pair Trading with Kinsale Capital and Adaptive Medias

The main advantage of trading using opposite Kinsale Capital and Adaptive Medias positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinsale Capital position performs unexpectedly, Adaptive Medias 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 Adaptive Medias will offset losses from the drop in Adaptive Medias' long position.

The idea behind Kinsale Capital Group and Adaptive Medias 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.

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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.