Correlation Between Kingsway Financial and Jiuzi Holdings

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

Diversification Opportunities for Kingsway Financial and Jiuzi Holdings

-0.83

Correlation Coefficient

Kingsway Financial  Jiuzi Holdings

Pay attention - limited upside

The 3 months correlation between Kingsway and Jiuzi is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Kingsway Financial Services and Jiuzi Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jiuzi Holdings 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 Jiuzi Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jiuzi Holdings has no effect on the direction of Kingsway Financial i.e., Kingsway Financial and Jiuzi Holdings go up and down completely randomly.

Pair Corralation between Kingsway Financial and Jiuzi Holdings

Considering the 90-day investment horizon Kingsway Financial Services is expected to under-perform the Jiuzi Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Kingsway Financial Services is 5.61 times less risky than Jiuzi Holdings. The stock trades about -0.09 of its potential returns per unit of risk. The Jiuzi Holdings is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  141.00  in Jiuzi Holdings on December 19, 2024 and sell it today you would earn a total of  377.00  from holding Jiuzi Holdings or generate 267.38% return on investment over 90 days.

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

Kingsway Financial Services  vs.  Jiuzi Holdings

Kingsway Financial

Risk-Adjusted Performance

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.

Jiuzi Holdings

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jiuzi Holdings are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Jiuzi Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kingsway Financial and Jiuzi Holdings

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

The idea behind Kingsway Financial Services and Jiuzi Holdings 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.