Correlation Between Kingsway Financial and Civeo Corp

Can any of the company-specific risk be diversified away by investing in both Kingsway Financial and Civeo Corp 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 Civeo Corp 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 Civeo Corp, you can compare the effects of market volatilities on Kingsway Financial and Civeo Corp 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 Civeo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingsway Financial and Civeo Corp.

Diversification Opportunities for Kingsway Financial and Civeo Corp

0.16

Correlation Coefficient

Kingsway Financial  Civeo Corp

Average diversification

The 3 months correlation between Kingsway and Civeo is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Kingsway Financial Services and Civeo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Civeo Corp 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 Civeo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Civeo Corp has no effect on the direction of Kingsway Financial i.e., Kingsway Financial and Civeo Corp go up and down completely randomly.

Pair Corralation between Kingsway Financial and Civeo Corp

Considering the 90-day investment horizon Kingsway Financial Services is expected to under-perform the Civeo Corp. But the stock apears to be less risky and, when comparing its historical volatility, Kingsway Financial Services is 1.37 times less risky than Civeo Corp. The stock trades about -0.22 of its potential returns per unit of risk. The Civeo Corp is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest  2,338  in Civeo Corp on September 30, 2024 and sell it today you would lose (118.00) from holding Civeo Corp or give up 5.05% of portfolio value over 90 days.

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

Kingsway Financial Services  vs.  Civeo Corp

Kingsway Financial

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kingsway Financial Services are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Kingsway Financial is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Civeo Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Civeo Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Kingsway Financial and Civeo Corp

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

The idea behind Kingsway Financial Services and Civeo Corp 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.