Correlation Between Naas Technology and Kingsway Financial

Can any of the company-specific risk be diversified away by investing in both Naas Technology 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 Naas Technology and Kingsway Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Naas Technology ADR and Kingsway Financial Services, you can compare the effects of market volatilities on Naas Technology 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 Naas Technology with a short position of Kingsway Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naas Technology and Kingsway Financial.

Diversification Opportunities for Naas Technology and Kingsway Financial

0.7

Correlation Coefficient

Naas Technology  Kingsway Financial

Poor diversification

The 3 months correlation between Naas and Kingsway is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Naas Technology ADR and Kingsway Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingsway Financial and Naas Technology 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 Naas Technology ADR 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 Naas Technology i.e., Naas Technology and Kingsway Financial go up and down completely randomly.

Pair Corralation between Naas Technology and Kingsway Financial

Given the investment horizon of 90 days Naas Technology ADR is expected to under-perform the Kingsway Financial. In addition to that, Naas Technology is 4.22 times more volatile than Kingsway Financial Services. It trades about -0.31 of its total potential returns per unit of risk. Kingsway Financial Services is currently generating about -0.06 per unit of volatility. If you would invest  859.00  in Kingsway Financial Services on March 20, 2024 and sell it today you would lose (59.00) from holding Kingsway Financial Services or give up 6.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.08%
Values	Daily Returns

Naas Technology ADR  vs.  Kingsway Financial Services

Naas Technology ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Naas Technology ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in July 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Kingsway Financial

Risk-Adjusted Performance

0 of 100

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 latest fragile performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Naas Technology and Kingsway Financial

The main advantage of trading using opposite Naas Technology and Kingsway Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naas Technology 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.

The idea behind Naas Technology ADR and Kingsway Financial Services 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.