Correlation Between Conifer Holding and Kingstone Companies

Can any of the company-specific risk be diversified away by investing in both Conifer Holding 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 Conifer Holding and Kingstone Companies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Conifer Holding and Kingstone Companies, you can compare the effects of market volatilities on Conifer Holding 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 Conifer Holding with a short position of Kingstone Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Conifer Holding and Kingstone Companies.

Diversification Opportunities for Conifer Holding and Kingstone Companies

-0.38

Correlation Coefficient

Conifer Holding  Kingstone Companies

Very good diversification

The 3 months correlation between Conifer and Kingstone is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Conifer Holding and Kingstone Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingstone Companies and Conifer Holding 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 Conifer Holding 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 Conifer Holding i.e., Conifer Holding and Kingstone Companies go up and down completely randomly.

Pair Corralation between Conifer Holding and Kingstone Companies

Given the investment horizon of 90 days Conifer Holding is expected to generate 1.38 times less return on investment than Kingstone Companies. In addition to that, Conifer Holding is 1.99 times more volatile than Kingstone Companies. It trades about 0.05 of its total potential returns per unit of risk. Kingstone Companies is currently generating about 0.15 per unit of volatility. If you would invest  702.00  in Kingstone Companies on October 25, 2024 and sell it today you would earn a total of  834.00  from holding Kingstone Companies or generate 118.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Conifer Holding  vs.  Kingstone Companies

Conifer Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Conifer Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Kingstone Companies

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kingstone Companies are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Kingstone Companies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Conifer Holding and Kingstone Companies

The main advantage of trading using opposite Conifer Holding and Kingstone Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Conifer Holding 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.

The idea behind Conifer Holding and Kingstone Companies 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.